?Currently, there is a shortfall of 200,000 to 230,000 dwellings; we should be building 180,000 to 200,000 dwellings every year and we are building less than that, he said.?
The above quote is a summary from Margot Saville at Property Observer.
She was commenting on the claim made by Dr. Shane Oliver at the Great Property Debate in Sydney on Tuesday.
We don?t know why Ms. Saville didn?t mention our presentation ? we spoke straight after Dr. Oliver.
Because we can guarantee you, we made it perfectly clear there?s no evidence for a chronic housing shortage. In fact, we made it so clear we spent 12 minutes out of our allocated 15 minutes talking about it!
(If you were there for the debate you?ll know for the first 12 minutes it was as though we were taking a leisurely stroll with our presentation as we covered one of our five points? whereas for the last three minutes we raced through it in the fashion of Usain Bolt covering 100 metres! Sorry about that.)
And we don?t know why ABC News and Channel Ten didn?t ask for an interview after the debate finished.
Sure, we were standing there talking to half a dozen Money Morning readers ? readers who told us they subscribed to our other services: Australian Small-Cap Investigator, Diggers & Drillers, Australian Wealth Gameplan? and our premium trading service, Slipstream Trader.
Anyway, it?s not as though your editor wasn?t available. We?d have been more than happy to have a yarn. And we did notice they interviewed each of the other presenters? so why not us?
We don?t know.
The mainstream doesn?t want to hear it
But, to be honest, it probably would have been a waste of their time and ours. We?ve experienced how the mainstream treats our views before. We tell it straight? they don?t like it? so our comments end up on the cutting room floor.
And considering the content of our presentation, it?s no surprise they gave us a wide berth.
We revealed the lies behind the so-called chronic housing shortage. Showing that Australia has an oversupply of housing:
Source: Anthony Street, Institute of Actuaries of Australia
We showed evidence why Australia?s house-price-to-income ratio is higher than other countries:
We explained how the mainstream press and spruikers have failed to provide any evidence to support their claims Australian houses are the best quality in the world. And that in fact it?s more a case of quantity rather than quality:
And we also provided amazing evidence to show why an external shock or high unemployment is not necessary for falling house prices. This example of the situation in Northern Ireland is mind-blowing:
And here?s the text we ran with it:
2005 Unemployment: 4.9%. 2006 Unemployment: 4.5%.
House prices peaked late 2006: red line
Unemployment was 3.8% in mid-2007: green line
Unemployment was 4.2% in mid-2008: blue line
By the end of 2010, Northern Ireland unemployment rate was 8%: purple line
First-home buyers ?more likely to default?
And if we hadn?t run out of time we would have shown the claims about a structural change in interest rates is irrelevant? that higher debt levels mean mortgage interest rates only need to rise to seven or eight per cent (where they are now) for it to have the same impact as the interest rate rises of 10% to 15% in the 1980s and 1990s.
This explains the report in The Sydney Morning Herald (SMH) yesterday:
?First home buyers may be more likely to default on their repayments than previously thought, a review from credit ratings agency Fitch shows.?
The SMH quotes the Fitch report:
?These figures show a substantial shift in the indebtedness of Australian borrowers, who are now significantly more sensitive to moves in interest rates than they were 20 years ago? For this reason, Fitch believes any downturn could be significantly worse than the recession of 1991, on which the current mortgage default criteria is based.?
It might have been nice if the boys and girls at Fitch had mentioned it on Tuesday. We understand they sent a dozen or so of their people along for the debate.
That?s what we had to say. Case closed in our opinion. But what did the antagonists have to say?
We?ll have more on that tomorrow.
But it amused us when Amanda Lynch from the Real Estate Institute of Australia (REIA) claimed ?housing is the engine room? of the Australian economy.
As we wrote in a note to Tony Hayek ? one of the housing bulls ? whom we were sat next to on the stage, ?It?s not the engine room. It?s the dining room, where people have been gorging themselves silly for years!?
The thing is, even fatties need to stop eating eventually. They can?t go on expanding forever. They either need to stop eating so much? or they?ll die.
It?s the same with the Aussie housing market. The credit-fuelled housing boom is over. The housing fatties have stopped eating and we?re now seeing what should have happened long ago ? a slimmer and less credit-gorged market.
But the mainstream doesn?t want to hear this. And it doesn?t want you to hear it either. Why? Because a boom built on credit soon collapses once the truth is known.
The longer they can keep the truth hidden? the longer they think they?ll postpone the collapse. Unfortunately for them, the fatty housing bubble is so big no-one can ignore it.
Soon enough its collapse will be so obvious, even the mainstream press won?t be able to deny it.
All content is ? - 2005 - 2011 Port Phillip Publishing Pty Ltd All Rights Reserved
We encourage you to republish our material, all we ask is that you provide a working text link back to the original article on this site. More information on our free financial content."""
