Let put to bed the Myth that we are different because we have a housing shortage?
In 2006 California Building Industry Association (CBIA) expressed alarm over what it called an ongoing housing crisis in Southern California. Alan Nevin, the associations chief economist, projected in a 2006 CBIA Housing Forecast that only 185,000 to 205,000 building permits will be granted in 2006r, far short of the 240,000 new homes needed each year. Southern California has been experiencing a massive population boom in recent years and its believed that 6 million new residents will be living in the region by 2020. The population increase, coupled with the housing shortage, has the CBIA worried that it will be increasingly difficult for first-time homebuyers to find a moderately priced unit. Los Angeles and Ventura counties are suffering from a housing crisis, said Holly Schroeder, chief executive officer of the Building Industry Association Greater Los Angeles Ventura Chapter. In 2006 the Median House Price in California was $275K today it is $175K this despite forecast of 6 million new residents all needing housing by 2020? Housing Demand did not save them. This example remind anyone of Australia?
(Oh yes the USA had SUB PRIME, but Australia has 45% of First home buyers Stressed at a time when interest rates are at 30 year lows? Imagine what will happen with a couple more rises)
Also a housing report in the UK in 2002 said Britain was heading for a property shortage of more than a MILLION homes by 2022 unless the current rate of house building is dramatically increased, according to reports from the Joseph Rowntree Foundation (JRF). The evidence, being presented at the Foundations Centenary Housing Conference in London, reveals that the supply of housing is already falling behind demand faster than previously recognised. House prices in the UK have fallen 15-45% depending on which area or sector you look at.
Again we are told Australia is different we wont crash we are UNIQUE in the world? Are we? Housing Demand forecasts in UK in 2002 & California were just like Australia in 2010 yet their prices crashed.
According to the ABS, 12,814 residential dwellings were approved in October 2009— that equates to about 150,000 constructed annually. Given that the average Australian household has 2.6 people, dwellings for about 400,000 Australian are being built each year. Last year, net migration to Australia was 213,461 (of which skilled migrants made up just over half). In short, there is substantially more housing than there are migrants. It appears that the housing shortage is two parts myth, zero parts reality. It is highly doubtful that migrants are even in a position to “bid up” the price of properties. The VAST MAJORITY migrants would not be in a position to pay $500,000 to purchase a property so they will have no impact on demand. According BIS Shrapnel, rents increased last year by only 3.5%, barely more than inflation. Not only are immigrants unlikely to cause property to rise they are having little effect on rental rates either.
Australian Population increases also occur organically, especially given Australia is in the midst of a baby boom. In 2008, 296,600 babies were born, the highest figure ever. However, last year 143,900 people died, meaning that actual population organic growth was only 152,700. So, even adding the net births to the net immigration levels (213K + 153K= 366K), it still appears that surplus housing is being built.(150K Houses built 2.6 people per house = Housing for 395K demand for addition shelter 366K SURPLUS= 29K) (FYI most babies born today aren’t in a position to enter the housing market for about 25 years so the recent baby boom is unlikely to be a cause of the recent price rises or demand). But PROPERTY SPRUIKERS put their stuff out you read it & don’t question its contents then PANIC like LEMMINGS & drive prices up , pay too much & wind up slaves to the Mortgage. But please don’t take my word for it look into it yourselves….Property is a commodity it is called SHELTER every commodity has a price SPRUIKERS talk it up to make their profits off you…