Dec
12
Supply Side Solutions – My Ass
I bet you been hearing a whole lotta talk from the housing/building/development industry recently about how the reason housing is so expensive is ’cause there’s not enough houses. And – my favourite excuse – that the industry hasn’t got enough land to build on.
The politicians, of course lap this up. Given that the majority of them aren’t actually trained classical economists, and a fair amount of them get some pretty nifty donations from the industry and a decent percentage probably make a reasonable income from property investment. It all makes sense to them.
And land rezoning is about the easiest thing a politician can do. It doesn’t require any legislation and they get a cool photo op with a spade and a pretty yellow sun hat.
UNFORTUNATELY this is all a bunch of bollocks.
Thanks to Tohm Curtis and his recently released report commissioned by Earthsharing Australia, we can now quite conclusively demonstrate that the issue isn’t supply it’s speculation.
Any idiot can tell you that if you have a resource and you want to make it more valuable, you don’t sell it all at once, you drip feed it into the market. That is exactly the issue facing our housing market. Far from the real estate industry’s advertised vacancy rate of 0.7% in inner Melbourne, the actual vacancy rate is 7%. To put that in real terms that’s 2,317 properties empty in central Melbourne during Australia’s worst ever housing crisis.
This speculative vacancy is what’s really driving the housing crisis.
So while there’s over 200 Melbourne University students without a home, there is enough housing vacant in Carlton alone to house every single one of them. And it’s their parents’ generation that is doing it to them.
At the start of last year there were 38,000 existing residentially zoned blocks of land vacant in Melbourne being help by the six big developers. This year Brumby gave a massive handout to the development industry and rezoned another 90,000 blocks of land for residential purposes.
NINETY THOUSAND
So has anyone noticed the price of land drop this year? Didn’t think so.
Of course the majority of that land was already owned by the developers so the rezoning made them overnight bajillionaires. And no, they won’t be building affordable housing, they’re building more suburban mcmansion ghettos which will be drip fed into the market to ensure they can charge the maximum amount for each and every one of those houses.
Our generation has come aboard the space ship of planet earth but all the seats are taken and we are left squeezing in the aisles.
The time has come to get real angry about this. Not angry and irrational, but angry and organised. Anyone keen to help out with creative action on this issue (and there are so many fun, beautiful things we can do!) should get in touch. We’ll be getting together in the new year to plan what to do.
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