PHOTO: Aussies are using homes as an investment strategy. Picture: Damian Shaw/NCA News WireSource: News Corp Australia
There isn’t a housing shortage. Here’s why property prices are soaring to eye-watering levels – and why it isn’t going to change any time soon.
It’s tempting to think home prices are soaring because there aren’t enough homes.
But that can’t explain the sudden takeoff from about the year 2000, the sudden takeoff from about 2013, and again now – against expectations – the stratospheric takeoff in the wake of the COVID-19 recession.
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Broadly, we’ve enough homes. The 2016 census found we had 12 per cent more dwellings than households, up from 10 per cent in 2001.
That’s 12 per cent of our houses and apartments empty – used as holiday homes and second homes, or waiting for tenants.
If there really weren’t enough homes for people who wanted them, it would be more than property prices soaring – it would be rents.
Instead, overall rents have been barely moving – growing even more slowly than wages – for half a decade.
For the half-decade from 2016, a half-decade in which Australia’s population grew by more than one million, Australian rents barely moved.
The supply of places to live in has kept pace with the demand for places to live in, but the supply of places to own has not.
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