A housing crisis. But not the one everyone’s talking about.
Absolutely every press release, whether it be television, radio, newspaper or digital media, has continued to predict life changing drops in the residential Australian property market.
Over the last 5 years, the majority of the so-called experts have been wrong. Prices have boomed when it was all doom and gloom.
I have to admit it’s an incredibly confusing time.
One thing we do know is that interest rates could never remain at the record low levels they were at, often described as “emergency rate”. That is exactly what these interest rates were, and interest rates simply had to go up.
The average owner occupied interest rate over the last 10 years is around 6.45 percent.
All of the above would have you believe that house prices and property prices are going to plummet.
I am confused. “But why?”, you ask.
Well since statistics have been available in the Australian property market, two statistic indicators have been a key driver of property prices:
- Vacancy rates, and
- Supply and demand.
Reading an article this weekend, it is suggested that we are facing a once in a lifetime crisis. Already we are 400,000 homes short of what is needed. To add to that, an additional half a million people are expected to move to Australia over the next few years. Current national vacancy rates are 1.3 percent; the lowest number ever recorded.
So the question is…
“Where are these people going to live? And who will provide housing?”
Neither the current Labour government or the previous Liberal government have provided any answers. To be fair we should give Labour some time for rating their success. Liberal were an abject failure at providing any relief.
The biggest provider of housing in this country are private investors.
So let’s just ponder those numbers and then consider the experts’ opinion that property prices are going to plunge. Vacancy rates and supply and demand numbers don’t support that theory.
Interesting yet, these are troubling times for a nation that prides itself on housing its people.
Time for some action, before the numbers of people sleeping in their cars or on the streets explodes.
Advance Australia “Fair”!