Australia's Housing Market is Oversupplied

For some years now we have been aware that developers have been marketing overseas, mainly in China and south east Asia, while claiming there is a housing shortage in our home market.

Michael Matusik, Director of Matusik Property Insights, who has been involved in over 500 new residential developments, admits that our housing market is oversupplied. You can read his article via this link - http://www.propertyobserver.com.au/residential/australia-s-housing-market-is-oversupplied.-yes-oversupplied/2011083051360

Because our manufacturing industry has largely gone offshore, the development industry has been used by lazy governments to boost our economy. Migration has been accelerated to feed the housing sector but the numbers of migrants have dropped from around the 300,000 p.a a few years ago to around the 150,000 p.a. so we are now building too much stock, hence the push recently to increase migrant numbers again. At the same time the development industry ignores the social housing shortage because there is not the same degree of economic return. They would rather sell to overseas customers because they are prepared to pay more. Of course, this pushes up prices and so the cost spiral continues.(The reality is that some developers are aggressively marketing overseas selling up to 50% of new housing estate to customers in those markets). 

Its time governments both federal and state start to develop new and innovative activities to drive our economic growth rather than relying on the development industry. As we've said before, to bring in migrants to feed the housing industry is just a ponzi scheme and somewhere along the line it will come to a disastrous end.

Lets Get the Facts Right

Recently we have been bombarded with articles in the media by Bernard Salt covering a range of issues about planning and population growth. Bernard Salt is often(almost always) described as a demographer or Australia's leading demographer. In a recent item in the Weekly Review, he said Melbourne needs New York style higher density because our population could double to 8 million and he has long argued that the retirement of our baby boomers about to exit the workforce will place pressure on our future tax base and our ability to cope with the aging society. The so called "Aging Population " is a scare tactic which is constantly being used by the growth lobby to argue the case for increased migration to bolster our workforce.

Well, lets get the facts straight, Salt is not a demographer, he is a partner at KPMG, a large accounting firm, and advises the big end of town on business issues. More accurately he could be described as a social commentator. He has now abandoned his baby boomer theories because he got his calculations wrong and he has retracted his position (sort of). In reality Bernard Salt could be described as a lobbyist for the business sector including the development, building and construction industry.

Residents in Boroondara may remember that Bernard Salt was used by our council to argue for its very flawed Activity Centres proposals. He was intoduced as a demographer at the "summit" and made some very silly comments about widows in their large cream brick veneers moving out to make room for families as a way of coping with the increasing population.

So far, because real demographers do not comment upon what a populist like Bernard Salt writes, he has flown under the radar and recieved little crirticism. To the contrary, he has received much adulation from business groups and the Australian newspaper.

We thought is was about time to balance the ledger.