{"id":30685,"date":"2012-07-06T00:12:52","date_gmt":"2012-07-06T04:12:52","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/2012\/07\/the-australian-housing-shortage-that-never-existed\/"},"modified":"2012-07-06T00:12:52","modified_gmt":"2012-07-06T04:12:52","slug":"the-australian-housing-shortage-that-never-existed","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2012\/07\/06\/the-australian-housing-shortage-that-never-existed\/","title":{"rendered":"The Australian Housing Shortage That Never Existed"},"content":{"rendered":"

By MoneyMorning.com.au<\/a><\/strong><\/p>\n

But based on the recent numbers from the 2011 census, it looks like the glory days of the Australian housing sector are over.<\/p>\n

Two events over the past four weeks sum up the desperation in the Australian housing lobby. The government funded National Housing Supply Council (NHSC) tried to talk up the so-called Australian housing shortage<\/strong>.<\/p>\n

<\/span><\/p>\n

It was a brave attempt, but just over a week later, their case was shot down. Here\u2019s how Bloomberg News<\/em> reported the NHSC update:<\/p>\n

\n

\u2018The revised national estimate of the housing shortfall at end-June 2010 is 200,000 dwellings, 13,000 greater than previously published.\u2019<\/em><\/p>\n<\/blockquote>\n

It was a gutsy move to revise the housing shortage numbers just two weeks before the release of the 2011 Census numbers. Too gutsy. We bet they wish they had waited.<\/p>\n

What Australian Housing Shortage?<\/h3>\n

<\/center><\/p>\n

Reporting on the Census statistics, a Bloomberg News<\/em> article revealed what we\u2019ve said for four years \u2014 the Australian housing shortage doesn\u2019t exist…<\/p>\n

\n

\u2018Australia has almost <\/em>1 million fewer households than assumed in government forecasts of a housing shortage, raising doubts about a supply shortfall cited as the main reason the nation will avoid a U.S.-style crash.\u2019<\/em><\/p>\n<\/blockquote>\n

The article continued:<\/p>\n

\n

\u2018<\/em>The Pacific nation had 7.8 million households, data released yesterday from the 2011 <\/em>Census<\/em><\/a> showed. That compared with estimates of 8.7 million as of June 2010, according to the latest figures used by the <\/em>National Housing Supply Council<\/em><\/a>, a group created by the government in May 2008 to monitor housing demand, supply and affordability. Australia\u2019s population also grew by 300,000 less than previously estimated, to 21.5 million.\u2019<\/em><\/p>\n<\/blockquote>\n

Oh dear.<\/p>\n

There are 300,000 fewer people in Australia than previously thought. That\u2019s a big difference. In fact, it\u2019s a huge difference. It\u2019s roughly equal to one year\u2019s immigration numbers.<\/p>\n

Put another way, one whole year of new arrivals (a big argument used by the spruikers for an Australian housing shortage) didn\u2019t happen!<\/p>\n

As for household estimates, the NHSC estimated Australia had 8.7 million households. It turns out there are only 7.8 million. Chairman of the NHSC, Owen Donald told Bloomberg News:<\/p>\n

\n

\u2018On the face of it, 900,000 is a gigantic difference. We need to get to the bottom of what\u2019s in the statistics bureau numbers.\u2019<\/em><\/p>\n<\/blockquote>\n

The entire Australian banking sector is built on a fallacy<\/a>. The banks built the housing bubble<\/a> on the false belief that the Australian population was soaring. The government even appointed a Population Minister!<\/p>\n

Turns out there wasn\u2019t and isn\u2019t a population crisis. There are 900,000 fewer Australian households and 300,000 fewer people than previously thought. What a miss!<\/p>\n

An Australian Housing Boom, Bust and Recovery<\/h3>\n

<\/center><\/p>\n

So now there\u2019s no denying it, Australia has a gigantic asset and credit bubble, and the property spruikers can\u2019t even use the excuse of high immigration to back their case.<\/p>\n

You\u2019ve seen the Australian \u00a0housing and banking boom. Now get ready for the Australian housing and banking bust<\/a>\u2026the next part of the business cycle.<\/p>\n

We\u2019ve campaigned long and hard over the past four years, arguing that a Australian housing shortage never existed<\/a> in reality. We were right. Those who called us mad are welcome to send their apologies to letters@moneymorning.com.au<\/a>.<\/p>\n

As we said at the top of this letter, credit and moneylending are vital to an economy. They enable the transfer of capital from those who don\u2019t have a current need for their money (savers) to those who do have a current need but don\u2019t have the capital (borrowers).<\/p>\n

So, used in the right way (without artificially low interest rates<\/a>), credit can boost an economy and help create innovation and progress. But used in the wrong way, it creates asset bubbles\u2026and that creates problems.<\/p>\n

Bottom line, the problem isn\u2019t credit per se<\/em>, but rather the central bankers and politicians who abuse it.<\/p>\n

Cheers,
\nKris.<\/strong><\/p>\n

PS.<\/strong> In the latest issue of Australian Small-Cap Investigator<\/a><\/em>, we took a closer look at the Aussie lending market and discovered a company that not only has a sensible risk-weighted approach to setting interest rates, but is also an innovator in the market. To find out more about this company, click here<\/a> to take out an obligation-free trial to Australian Small-Cap Investigator<\/em>.<\/p>\n

Related Articles<\/em><\/strong><\/p>\n

Market Pullback Exposes Five Stocks to Buy<\/a><\/p>\n

The Interest Rate Banana Your Stocks Will Slip On<\/a><\/p>\n

‘Big Wednesday’ For the Aussie Dollar<\/a><\/p>\n

\n<\/img><\/a> <\/img><\/a> <\/img><\/a>\n<\/div>\n


\nThe Australian Housing Shortage That Never Existed <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By MoneyMorning.com.au But based on the recent numbers from the 2011 census, it looks like the glory days of the Australian housing sector are over. Two events over the past four weeks sum up the desperation in the Australian housing lobby. The government funded National Housing Supply Council (NHSC) tried to talk up the so-called … <\/p>\n

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