"It’s a lie. Not a mistake, but a lie – one that has been carefully and obsessively constructed by vested interests over several years."
Australia's so-called housing shortage is a lie constructed by vested interests
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Modern journalism is about sitting around twiddling your thumbs, before springing to life whenever a media handout from a company or lobby group comes across your desk.
This is when 21st-century journalists earn their pay. Quickly and expertly, they stylishly re-write the press release. Job done. Then it’s off to the cafeteria for another coffee.
Surveys have found that most of the articles in newspapers today are press release re-writes. I track the output of hacks writing about real estate for big-city newspapers and find that many never stray from the easy-street path of regurgitating propaganda from industry groups. All their articles have just one source: the individual or organization who sent in the press release.
This is how the idea of “a housing shortage crisis” has come to be accepted as fact by media outlets around Australia.
The people who send them press releases say it’s the case, so why would they doubt it.
Here’s the problem. It’s a lie. Not a mistake, but a lie – one that has been carefully and obsessively constructed by vested interests over several years.
There is no shortage. Indeed, all the evidence contradicts it. The evidence is so compelling that there is only one explanation for journalists’ inability to see it: extraordinary incompetence and laziness in equal measure.
The argument put forward, almost daily, by the building industry is that Australia is not building enough new homes. Their talking heads claim there is strong demand but the nation has failed to satisfy that demand, to the extent that we have a shortfall of over 200,000 homes. I keep asking where those 200,000-plus households are living (under bridges? in tents?), but no one has an answer.
Economic laws dictate that this means we should have rising prices and rents. Indeed, given the serious nature of the shortage – usually characterised as “chronic” – prices and rents must be soaring, with double-digit annual growth.
But the opposite has happened. Prices, generally speaking, have fallen in all our major cities over the past two years. Strong demand, a chronic shortage, yet prices have fallen. Have we slipped into a parallel universe?
Vacancies in many parts of Australia tend towards the low side of the 3% mark considered to be a balanced market, but not by a great margin. In “a chronic housing shortage crisis” vacancies would be near zero, but the average across Australia is around 2%, according to SQM Research.
Here’s further evidence: In several of Australia’s biggest residential markets, including Melbourne, Sydney and the Gold Coast, developers are offering incentives to induce consumers to buy their products. Free tropical getaways, new cars, fees waived, all kinds of monetary inducements.
Why? Because they can’t shift their product any other way. There are too many new dwellings and not enough demand.