The 2011 census has shown the foundations of Australia’s housing boom may not be as concrete as first thought. The property industry has frequently said an acute shortage of homes in Australia will put a floor under Australia’s overpriced housing market.
Bloomberg told the world last night, “Australia has almost 1 million fewer households than assumed in government forecasts of a housing shortage, raising doubts about a supply shortfall cited as the main reason the nation will avoid a U.S.-style crash.”
The government forecasts comes from The National Housing Supply Council, an independent group set up by the Australian Government in May 2008 to monitor housing demand, supply and affordability. Chairman Owen Donald, told Bloomberg, “On the face of it, 900,000 is a gigantic difference,”
“We need to get to the bottom of what’s in the statistics bureau numbers.”
» Vanishing Households Undercut Claim of Australia Shortage – Bloomberg, 22nd June 2012.
Quick increase Immigration!
I just completed a survey in Melbourne’s bayside suburb of Frankston-Seaford that involved accessing approx. 2000 homes. Of the 2000 properties, well over 100 were vacant-derelict. Other derelict houses had squatters living in them. The vacant houses were confirmed as vacant by neighbours. My guess is that many of these dwellings were probably livable if it were not for them being trashed by squatters.
We are searching the owners of these properties and they are definitely investment properties. The owners don’t rent them as the costs to make these 1950’s built properties rentable is to great. Recent planning laws have been amended allowing 4-6 storey construction instead of 2.
In a nutshell this bayside suburb sample has a housing vacancy rate of 5% as confirmed by on-site investigation. The properties have been purchased by investors who I believe were instrumental in influencing these changes of the re-zoning laws.
10 years after the start of the 1890 depression Australias occupancy ratio was 4.5 – 5
Mmmm… 22.5 million people / 4.5 = 5 million dwellings plus (10%) 500,000 holiday homes for the 10% who are rich.
Any takers for a… for sale/for rent… sign busines!
FWIW… Oldies that move in with the struggling kids (occupancy compression) who own debt free houses, will trash the rental yield with vacancy.
NG’s with debt will struggle when rents collapse.
Several million vacancy all competing for the same $40 billion gross rent.
@ Michael Francis – Seaford/Franga area with vacant and derelict houses occupied by squatters.
Who’dathunkit!
I’m all for the squatters making use of these mal-investments. The infestors don’t seek rent, but rather economic rent by capital gain. So the squatter naturally exploits this and lives rent free. Smart move if you ask me.
Still, I’d rather them in Frankganistan than inner Melb. But I do tut-tut the malevolent damage. If I found a good squat I’d want to blend in with the neighbours and look after it. A good squat is hard to find.
Have a mate that bought in the area a year ago despite advice to the contrary (as to both buying in near the top of a bubble AND the area in general). Area has graffitti on every surface, burnout skids in every street, high proportion of unkempt looking properties. Typically fibro shacks.
@Average Bloke..jokes aside immigration would have to increase substantially to have any effect..They have already exploited the “Cashed up” Chinese in places like Sydney whom have bought a large portion of realestate in the inner suburbs.
Focusing on Demographics alone where the baby boomers own a huge percentage of the realestate market, the oversupply will get worse over time as they look to retire.
@ Dominic. It’s ok mate I was being sarcastic. I was assuming what a bribed polly would bleat to the media to save his Property Developer backers.
I think what Owen Donald meant was we need to get to the bottom of these numbers and then quickly discredit them to keep the real estate industry happy.
Remember, the media in Australia runs the tightest propaganda machine in the world. They contributed and fostered the housing price bubble in Australia and will continue to do so. There are constant stream of articles that talk up the Australian market and tell us how different we are to the rest of the world, full of jingoist fervor. But eventually even with all the media disinformation the “market” will learn the Ponzi scheme that is the Australian real estate has finally ended
The end to the property bubble can’t come soon enough, to sweep away the urgers associated with it, especially in the media and the RBA, but also many dimwitted, smug relatives who worship at its alter.