ABS Census data just released shows 1.1 million fewer households and 595,000 fewer houses in Australia than previous estimates; Morgan Stanley researchers calculate Australia now has a 341,000 OVERSUPPLY of houses.
The Census revision obliged National Housing Supply Council chairman Owen Donald to recant recent NHSC calculations of a 228,000 dwelling undersupply in today’s Australian Financial Review. Prosper does not criticise Dr Donald for the error, based as it is on official data.
“I think we just run out of government agencies in denial about Australia’s land bubble,” Prosper Australia Campaign Manager David Collyer said today.
“There is now no support for the views of the property industry, nor any reason to stimulate house prices to overcome ‘shortages’.
“The new Census data affirms the 90,000 Melbourne houses identified empty in Earthsharing’s Speculative Vacancies Report released two weeks ago.
“A massive pipeline of new construction was prompted by a decade of strongly rising prices. Developers responded to the big profits on offer by accelerating their activity. Nationwide, there are now 380,000 houses sitting unsold on the market, plus a shadow inventory at least as big.
“Over the last five years, young adults also reacted rationally to high housing costs by widespread communal household creation, or living with their parents, and abandoning home ownership as a personal objective. House prices have decoupled from rents – a key measure of objective value.
Potential homebuyers are deliberately standing aside or have been refused bank loans.
“Either way, first home buyers are absent. And they are the single most important source of new capital into housing that enables others to trade up or exit. Only a significant change in housing affordability will reengage them.
“The current economic settings – profound housing oversupply, debt aversion, unsustainable affordability metrics – must keep the property industry and negative gearers awake at night.
Collyer reaffirmed Prosper Australia’s forecast of 15 per cent price falls this calendar year and possible 20 per cent falls.
“With the year half gone we are exactly on track to fulfil this dour prediction,” Collyer concluded.
Don’t Buy Now!
Media Contact: David Collyer 0413 248 193
About Prosper: Prosper Australia is a tax reform lobby group and think tank that is now 120 years old. It seeks to move the base of government revenues from taxing individuals and enterprise to capturing the economic rents of the natural endowment, notably through Land Value Tax and Mining Tax.