David Jennings:

>> But where were they empty? I doubt they were empty near the CBD or the main suburbs of Sydney, Melbourne or Brisbane. Poor urban planning is as much a cause of our housing crisis than any outside factor. <<

A reasonable question. I don't know exactly where the empty houses are, but I would guess that they are spread all about, with more in the less desirable areas.

But if your question implies that the empty houses are ALL on the fringes of suburbia or in country towns, the laws of supply and demand, if they existed and worked as the housing spruikers and free marketeers would like us to believe, should have ensured that prices would drop to a market clearing rate, shouldn't they? Has that been happening? In reality, even in those less desirable areas prices have risen to unaffordable levels. Houses on the very fringes of Melbourne, in supposedly unfashionable, unlikable areas where prices have languished for many decades and even declined when other areas have risen, have multiplied in price by nearly 10 times in the last 10 years. How much have incomes in those areas risen in that time?

The main factor in the house price mania is the willingness of banks to keep extending credit to Australian home-buyers, beyond what they can, in reality, afford. The other factor is the insane slanting of our tax system to favour 'investors' who lose money!

One other point: the mania is possibly creating a demand monster. But how much of the manic demand (that is, the total amount of credit available for house purchasing) is for occupied, established houses? Just how much of the demand is tied to a clamour for houses that don't exist? Do we need more houses, or cheaper houses? I don't think more houses will make them cheaper if credit continues to mount up.

Fester:

>> This statement is patently false, and suggests little empathy or interest in the plight of the burgeoning numbers of Australians suffering housing stress. <<

Tripe. How do you know it's 'patently false'? You don't. You're arguing with the census statistics? You know better? Go to
http://bubblepedia.net.au/tiki-index.php?page=OverbuildingByLocation
Last column - 'Unoccupied dwellings, 2006' = 830,376

And 'little empathy' for those suffering 'housing stress'? Me? Tosh. It's the government who has shown little empathy. I have stated in a post that the real crisis, those 'suffering' the worst 'housing stress' are those that require public housing at affordable rates and without having to wait 10 years. What empathy for or interest in those people have you shown? The current tax system is mostly to blame, allowing 'investors' to purchase houses with 40% of available credit and to make a loss on the income from them while waiting for the lowly taxed capital gain! The negatively geared of this world are the ones who have little empathy. Are you negatively geared, Fester? Talk about government being 'more interested in helping their mates'!

Today, the housing minister gave a mealy mouthed explanation of the FHOG - it was intended to help the building industry. Astounding. The grant pushed up the prices of houses so much that eventually people could no longer afford to buy and builders began to lay people off - this is happening at a disastrous level in Queensland.

By the way, your raw population statistics imply an average household size of about 4 for those newly built houses, if in fact those are the only dwellings available for those 450,000 people which is most unlikely. That's not so bad, though. Perhaps you should be blaming all the lone dwellers and childless couples (or even separated/divorced singles?) living in 4-bedroom/3-bathroom McMansions.

Fester, the house price mania is indeed driven by what you call 'wanton speculation'. Many house owners are also speculators. Do you think that everyone in this country can become rich by losing money?

David Jennings,

you might also be interested in the ABS census statistics for 2006 which can be found at

http://bubblepedia.net.au/tiki-index.php?page=OverbuildingByLocation

Many regional areas are included. It's well worth a close look.

Rap

"You're arguing with the census statistics? You know better?"

Yes, I do know better, and I would suggest that you are misinterpreting the census statistics. If you look at the census data you will find that

"Unoccupied dwellings include vacant dwellings available for sale or renting; dwellings such as weekenders or holiday homes and seasonal workers' quarters which were not occupied on Census night; dwellings normally occupied but whose occupants were temporarily absent on the night of the Census; newly completed dwellings whose owners or tenants had not entered into occupation on Census night; dwellings described as 'to be demolished', 'condemned', 'exhibition home', etc. The total number of unoccupied dwellings does not, therefore, represent the number of vacant houses and flats available for sale or renting. "

http://assda.anu.edu.au/census/c66/explanatory/dwellings.html

There simply isn't enough information to draw a meaningful insight. Still, that didn't stop a false insight being drawn from the data. But there is plenty of other data to sugest a supply crisis, such as rental vacancy rates, which are at record low levels across Australia. Of course, there are divisions within markets, but to suggest that there is no housing crisis in the face of so much evidence is strange. Where are all these vacant dwellings?

"By the way, your raw population statistics imply an average household size of about 4 for those newly built houses, if in fact those are the only dwellings available for those 450,000 people which is most unlikely."

Yes, but how many of those homes are available to people who need them? A vacant luxury apartment does little to ease the rental crisis for the needy. I dont think that Marie Antoinette could have interpreted it better.

I can add a little more to this discussion.
On the Pacific Hwy in Northern Sydney there has been a number of
five to seven story unit blocks built. About 16 blocks in one area.
Driving past them at night you can count the number of lit windows in
all of them on your fingers.

I have been in some of these blocks and the car parks are almost empty.
It is not just that they are at work or somewhere because even the
storage areas are empty.

They are just not selling despite the agent's enthusiasm.
That is why they have been filling the jets to Hong Kong.

The reason has to be because they are too expensive, even for someone
like me who has a house to sell. One that I know about has knocked
$100,000 off the original price.

DEbt Clock Now $74,411,638,891.00
Up a billion since yesterday !