I read these comments on (shock! horror!) Macrobusiness. What do APF members think? Is there a bona fide housing shortage? My thoughts are this. If, as some say, grannies and rich folk are hoarding "too much house" then rather than prove the non-existence of a shortage, doesn't this create a shortage of available homes for everyone else?
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Shortage-deniers have an array of arguments that they use to placate decent people who are worried about the housing situation and its affect on its victims.
Many of the arguments are specious, many are just tricks with semantics, and most of the arguments contradict one another.
For example a shortage-denier will be adamant that a flat level of asking rents is a wonderful proof of the shortage myth. When the stupidity of this is demonstrated, the shortage-deniers moves on to claim that holiday houses using little water is the best proof of the shortage myth.
When it is pointed out that holiday homes are owned by rich people, are unavailable to rent to poor people, and are far from poor peoples’ jobs, the shortage-denier unphased moves to claim that in Ireland some people claimed there was a shortage and then prices fell, now other people claim there is a shortage in Sydney therefore this must be a myth.
Now Rod Burgess has stumbled on another shortage-denier favourite, the so-called empty bedroom issue. If Rod would place one of his feet in a bucket of ice, and the other in boiling water, I would be interested to hear if his feet are “on average” a comfortable temperature.
Now imagine something completely different. A rich granny lives in a large house by herself. Meanwhile a young family with 2 kids is jammed into a rented dogbox. The family loses their income and is evicted. What mechanism will ensure that rich granny shares her house with the poor young family? Are Australians “on average” quite well housed?
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I find the shortage-denier to be a bizarre and fascinating creature. I am amazed at the nonsense they come up with. When the nonsense of the denier is repeatedly refuted, often the denier moves on to a personal attack, or questions my motivation. I have been accused of being a property developer and a real estate agent! Does it get worse than that?
I am a person interested in the truth, interested in helping people who are suffering, and interested in explaining simple concepts that reasonable people should be able to grasp. Here’s one: If the “amount” of extra people exceeds the amount of extra housing then basically a shortage of housing (for lack of a better word) will result. This will cause higher prices, higher rents and suffering as people pay more and get less housing than before (ie previous generations)
Now I believe that the word “shortage” does a reasonable job of describing the situation of housing in Australian cities – considering it is only one word. However one word is not perfect to describe the housing disaster in detail. I can give you 100 words, or 1000 words, or 100 pages that would describe it better. Do you want to understand the situation and fix the problems, or do you prefer to argue over the meaning of one word?
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It is quite remarkable the efforts that people will go to try to explain why there is no shortage even when prices are at record levels and vacancy rates remain exceedingly low.
Invariably the explanations they offer eventually reveal the real cause for their determination.
Some common ones include:
* An environment concern about the human foot print. If there is NO shortage the foot print need not expand.
* A concern about immigration – supporting more houses sounds like support for a Big Australia
* A concern about developers and real estate agents – more houses means more work for the devils.
* A concern about consumerism – new houses tend to be big and inhabited by uncultured consuming bogans
* A concerns for heritage (old buildings) – new houses often implies knocking down old ones.
I have a lot of sympathy for many of these concerns but the thing is, denying there is a shortage of housing does nothing to address them.
For most of them the best action would be to stop population growth as then additional houses will be unnecessary (except to replace old worn out ones).
But if that is what they want they should say so – it would make Bluebird a happy fellow.
All denying does is make life miserable for those on lower incomes.
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I am the owner of one of those homes on the South Coast that sit vacant for most of the year. I owe nothing on it, pay council rates as and when they fall due (at a rate that one can only assume is calculated to ensure that Council has sufficient funds to pay for services provided), pay land tax and will inevitably pay capital gains tax at my marginal tax rate when I sell.
Your proposition seems to be that people like me are committing a social crime, owning a property that someone else should live in, and therefore rates should be increased to the point that I sell thus adding to the supply of housing stock.
Setting apart the obvious objectionable attack on personal property rights implicit in that line of thought, I doubt it would work from a public policy perspective.
House prices up and down the NSW coast tanked in the wake of the GFC, as financial services types lost their high paying job and jettisoned the holiday house. I took advantage of this and bought at the bottom of the market. Prices in most locations have still not recovered to their pre-GFC days.
Given that council rates are based on the value of the land, it stands to reason that they have declined over the last few years and remained low.
House prices also reflect the lack of infrastructure, particularly hospitals, in these locations. Relatives of mine who moved to Vincentia on their retirement moved back to Sydney three years later when the husband was diagnosed with cancer that could only be treated at one of the Sydney teaching hospitals. I know of many other such outcomes. Many of these locations are therefore not suitable for many families as permanent homes especially when the lack of reliable full time employment is factored in.
I read these comments on (shock! horror!) Macrobusiness. What do APF members think? Is there a bona fide housing shortage? My thoughts are this. If, as some say, grannies and rich folk are hoarding "too much house" then rather than prove the non-existence of a shortage, doesn't this create a shortage of available homes for everyone else?
If prices are rising then there is a shortage, and the rate of price change will give you some idea of the size of the shortage.
If prices are falling then there is a surplus.
It would take an event like the great depression to alter long held behaviour patterns and convince people to rent out their spare bedrooms.
Any expressed market opinion is my own and is not to be taken as financial advice
If prices are rising then there is a shortage, and the rate of price change will give you some idea of the size of the shortage.
If prices are falling then there is a surplus.
It would take an event like the great depression to alter long held behaviour patterns and convince people to rent out their spare bedrooms.
And to think your a mortgage broker Peter, really.
You say if prices are rising there is a shortage and you said if pricas arre falling there is a surplus.
This is incorrect Peter. Every other country that has collapsed also spriuked a housing shortage.
So are you saying that prior to 2008, there was a housing shortage and that after 2008 it just dissapeared.funny stuff.
Lets have a lot at our own market. When interest rates dropped in late 2009-2010, the prices started rising, at the time ,historically low interest rates. And thats when prices started rising, not because we had a shortage all of a sudden but because the interest rstes dropped in a big way.
Then what happened, we saw prices in some sydney areas drop down 15-20% over 2011-2012, again not bevause there was a surplus in housing but because interest rates rose, and people could not longer pay forit. That is the reason Peter, not the one you made up. We then saw rates dropped to record lows and the prices started rising again, not because of a shortage of housing.
There is no housing shortage, its just another way governments and vested interests suck sheep in to keep their gravy train rolling, too bad the wheels are falling off fast.
Now you know the real reason Peter, not your made up one.Honestly mate.......
In Australia our average household size is 2.3 people, in every other country that has crashed, there houshold size is larger than ours, meaning we have more houses person that all these places that crashed.
The housold size for Australai has been lower than all of them for a decade or more.
There is no housing shortage, infact with all the building going on over the last five yearz, I would say we had one of the biggest housing surplusses ever, if not its certainly headed that way.
Just look at all the units being built in Sydney, unbelievable, look around surrey hills, ultimo and check out allthose being built around south dowling street, this is five minutes from the city, there is a lot more branching outwards too. I saw two complexes go up near me a number of years ago.It was built above a rather large shopping center, one had around 500 units and the other 800, I dont know how its possible and looked at the plan prior to building. If they built this many units on sucj a small area, it looks like they must have built hundreds of thousands around sydney over the last five years and the ones still being completed.
In Australia our average household size is 2.3 people, in every other country that has crashed, there houshold size is larger than ours, meaning we have more houses person that all these places that crashed.
The housold size for Australai has been lower than all of them for a decade or more.
There is no housing shortage, infact with all the building going on over the last five yearz, I would say we had one of the biggest housing surplusses ever, if not its certainly headed that way.
Just look at all the units being built in Sydney, unbelievable, look around surrey hills, ultimo and check out allthose being built around south dowling street, this is five minutes from the city, there is a lot more branching outwards too. I saw two complexes go up near me a number of years ago.It was built above a rather large shopping center, one had around 500 units and the other 800, I dont know how its possible and looked at the plan prior to building. If they built this many units on sucj a small area, it looks like they must have built hundreds of thousands around sydney over the last five years and the ones still being completed.
You're hopelessly lost in a sea of bovine excreta Ted.
Get professional help.
Any expressed market opinion is my own and is not to be taken as financial advice
If there was a shortage the residential construction industry would have ramped up years ago to fill it. There is no shortage of land, no shortage of tradesman hungry for work, no shortage of bedrooms for people to sleep in as was stated above. The only shortage that now exists is a shortage of people to go into debt for 30 years to buy one. Or to buy another one for rent.
This forum has quite a few property investors on it but I cannot recall a single one buying a property for rent since I joined. What does that tell you?
Shadow was hopelessly wrong about the Gold Bull Market. What else is he wrong about?
This forum has quite a few property investors on it but I cannot recall a single one buying a property for rent since I joined. What does that tell you?
It tells me you are a senile old fool with a very short and selective memory.
Ignore posts by The Whole Truth · View Post · End Ignoring The forum fuckwit goes RRRAAARRRGGHHhhh - But not a fuck was given..................by anyone.
If there was a shortage the residential construction industry would have ramped up years ago to fill it. There is no shortage of land, no shortage of tradesman hungry for work, no shortage of bedrooms for people to sleep in as was stated above. The only shortage that now exists is a shortage of people to go into debt for 30 years to buy one. Or to buy another one for rent.
This forum has quite a few property investors on it but I cannot recall a single one buying a property for rent since I joined. What does that tell you?
there is no shortage of raw materials or labour to provide houses, but people (developers) who produce land and housing won't produce them when the market price is below their production costs. So when prices fall developers take a holiday until the prices rise again. Wouldn't you? No one wants to work for nothing.
The result of that is when the market crashes no new supply is added and the shortage then drives a boom when buyer pressure builds up.
The price of housing in Australia ramped up for one reason only - government input costs. If you add to the production cost of anything using higher tax inputs then the retail price MUST rise. It had little to do with easy credit or anything else.
Any expressed market opinion is my own and is not to be taken as financial advice
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