"If property is such a great investment now why isn't their a building boom?"
(I'll bet that the second you clicked on "Post Message", you said to yourself, "Damn, that was a dumb thing to say? I really didn't think through that one!"
Let me give you the obvious answer that you should have stored somewhere back in the deep recesses of your mind (at least, one hopes you do, otherwise you are likely to be a bit of trouble coping with some of life's most basic financial literacy concepts):
Property is a great investment for the very reason that there has been no building boom.
The most basic tenet of economics applies, that of supply and demand.
Demand for housing we know, is going up... Household formation occurs unabated.
But Housing supply is another issue altogether.
Housing supply - as you rightly imply in your question - has for some considerable period of time lagged demand for housing.
The reasons for this lag are manifold, and in the interests of brevity i will avoid discussing them herein.
Now, back to Economics One-Oh-One:
When the rate of change in the demand for a good or a service exceeds the rate of change in the supply of that good or service, the price of the good or service rises. Axiom.
There's your Australian housing situation right there.
Which raises another interesting point, and that is that housing is not a commodity for which you can just flick your fingers to make it appear. The stuff of housing is scarce. And scarce stuff tends to go up in value over time.
