balkanghost

Property Shortages and Real Estate Myths.


Housing industry's missing persons reports pure fiction. MISSING: Authorities are seeking the public's help in locating 190,000 families who have mysteriously disappeared from Australia.

REWARD: $60 billion, for any developer or builder who can find them.

These are the 190,000 households that, according to the construction industry, are desperately seeking new homes but can't get them.

I've been looking for them, but can't find them.

I know many builders have been having the same problem.

I'm beginning to think they don't exist.

The Housing Industry Association keeps telling us we have a chronic housing shortage, with a shortfall of 190,000 homes........

.... If you're looking for a copy of this publication, you're likely to find it in libraries in the "fantasy" section, because the ABS tells us that the average first-home buyer in Australia borrows $292,000.

The report that claims unsatisfied demand for 190,000 new homes should be found in the "science fiction" section, alongside books that depict time travel and interaction with aliens from worlds a thousand light years from earth......

......The odd thing about this persistent complaint that we're not building enough houses is that the loudest whingers are the people whose job it is to build houses. There are large tracts of zoned residential land in our cities (owned by major developers) waiting for houses to be built on them.

If we've got a 190,000 shortfall, why aren't they frantically building?

If the HIA figures were true, we'd have tens of thousands of families living in tents or under bridges......

......I've taken a look at city vacancy rates, expecting them to be zero everywhere. That would be a reasonable expectation, if supply had fallen so far behind demand. But, according to RP Data, all our cities have vacancies above 3 per cent, except Canberra and Adelaide.....

....We're talking true vacancies here, not the "lies, damned lies and statistics" published by the real estate institutes.

Something doesn't add up here. If we really did have a chronic housing shortage, rents would be going through the roof.

.....Seasoned property market analyst Michael Matusik (of Matusik Property Insights) says we are actually heading into oversupply.

He says those who cry "undersupply" are miscalculating the impact of recent population growth.

Much of the nation's population growth has come from overseas migrants, most of whom are "family reunion" migrants, students attending our universities or business people on temporary visas.

........When you factor these matters into the supply-demand equation, he says, we're actually over-building.

This runs contrary to the incessant campaigning of the developer lobby, whose members have motives that prevent them from giving the public accurate information.

Matusik says: "Disbelieve anyone whose sales pitch is based around how much the market is under-supplied."

All of this is sober reading for property investors.

Steve2009

RP Data isn't part and parcel of the Real Estate Pravda? Who would have thunk it?

ABCDiamond

Written by Terry Ryder, whose Hotspotting reports are the ultimate property investment tool. Better buy his reports to make sure you buy in the right area


Something from Victoria's Auditor-General
Who knows what is true and what isn't...

There are two sets of vacancy reports, one including holiday homes etc, and one without. Who knows which one anyone uses at which time.

Accuracy of Vacancy Rates
http://blogs.domain.com.au/2008/05/a...y_rates_1.html

balkanghost

Few things we do know for sure:

Real Estate Institutes' members are the biggest advertisers in real estate

Population growth figures used by real estate industry have slowed and been slowing for past 12 months.... know personally from international education, that segment of overseas visitors will slow and decrease further in 2011 via less new commencements, enrolments as PR pathways close and those on bridging visas return home unable to find relevant employment....

Friend's sister has had vacant flat/investment property for over one month now in Prahran inner city.... unable to find tenants.....needs rent to pay mortgage....

Heard word from lawyer in Melbourne's eastern suburbs i.e. Box Hill doing conveyancing.... if you want to buy an apt., 2011 will see oversupply....

Centurion

I'd agree with much of that. Figures produced by an entirely biased agency who represents builders cannot be trusted.

The arguments they put forward to support the conclusions that;

1. Housing is in some sort of crisis under supply.
2. Federal funding should be re-introduced to bolster the market.
3. Local taxation should be cut to make property more affordable to develop.

When you look at the premises supporting those arguments, frankly it's weak crap, smoke and mirrors and nothing but advertising and lobbying for the industry.

Steve2009

We had an extraordinary number of holiday homes in Ireland at one point too. Now we just call them empties....

Bermudashorts

I really don't know a lot about this subject, but would guess that some people on this thread, haven't had to find anywhere to live recently!

Steve2009

Just rented in brisbane in july and didn't have a problem. Sydney inner west seems fine too from talking to friends.

Bermudashorts

No idea what Sydney inner west means. Anyway we just arrived and my experience is that the market is very competitive. Only dumps were readily available, but the decent places in decent areas would be snapped up on the first day of showing.

lapin_windstar

There is no shortage of housing. There's just a shortage of cheap housing.
http://en.wikipedia.org/wiki/Inner_West_%28Sydney%29

Bermudashorts

Well I was not interested in cheap housing, I was after quality housing and my budget was very flexible. And I can categorically say that there is a lot of competition for housing and not just the cheap stuff. We found somewhere in a couple of weeks, but no way did we hold the cards here, the landlords did and this is indicative of a housing shortage.

Steve2009

Of course the dumps are empty. People usually try to let before their lease runs out and equally landlords try to rent to new tenants before their existing leases end. The fact that there is properties available immediately suggests that there is a surplus, the market is functioning and the quality stock is utilised, I would also bet that there is empty stock that is priced too high for the market. That's the nature of a functioning market.

We leased in Brisbane a month before we needed the property, the landlord split the month's vacancy with us and we moved in as soon as we came back from vacation. We viewed dumps at the lower end of the market and also white elephants at the upper end of the market. We found somewhere at the upper end of the market that offered good value after a few weeks of looking.

NedKelly

I can tell you where some of these 190,000 families live.

1. In caravan parks.(at a guess there must be 1000 in Australia)
2. In government housing.
3. In jails. (35,000 odd)
4. In forces accommodation

I bet they don't include these when they work out the so-called shortage.

Bermudashorts

My point is that the fact the prospective tenants that have to jump through hoops and not the landlords, is indicative of there being a shortage of property in the market and not a shortage of tenants. Anyway as I mentioned in my first post, I have not studied the real estate market in Autralia in any detail and am just commenting on my own experience as a new arrival to Australia. My experience is that it is quite hard to find somewhere to live and there is a lot of competition.

We are renting a $1.7m property on the Northern Beaches and I believe we gazumped somebody who had already paid a deposit. (We didn't do anything but the agent decided we were a better tenant than they were). We were never looking at cheap stuff but there are still landlords that seem to think they can let their property get into a state of disrepair and rent it out for $1k a week because the market is tough. During my search, I knew that the bargaining chips were not in my hands despite having a flexible budget.

EDIT: Sorry I know that mentioning the type and value of property I am living in sounds vulgar, but when I mentioned that we had trouble finding somewhere to live I just got all these comments which seemed to suggest I could expect no better if I was looking at cheap dumps.

Steve2009

The rents are pretty modest compared to the market sale values though. By rights a property valued in that league souls be renting for a sum of the order of 3000 a week. The landlords are on a major loss.