Refreshing approach from MBA but not the HIA: Terry Ryder

It's refreshing to see a positive response to the ABS housing finance data from Master Builders Australia.

It says the figures show further signs of green shoots and that confidence may be returning to the housing sector. A pleasant contrast to the constant negative rantings from the Housing Industry Association.

The Housing Industry Association has meanwhile embarked on a national program of misinformation. In doing so, it is set to confirm its reputation as the least credible and most ineffectual of the bodies claiming to represent the real estate industry.

The HIA is running radio and print advertisements in a campaign which “aims to place housing issues squarely on the national agenda”. It says it will highlight the distressing “facts impacting new housing”.

It outlines the six “facts” that underpin its arguments but this is where the campaign has failed barely before it has started. Its claims are not facts, but a motley collection of opinions, predictions and rubbery statistics.

Here are the HIA’s claims and the reasons they don’t stand up to scrutiny.

“FACT: This year, Australia will build 25,000 less homes than we did a decade ago.” This is not a fact. It’s a prediction. How can a forecast be a “fact”?

“FACT: Building and construction has contracted every month for the last 34 months.” This is plain wrong. The HIA itself issued a press release last month describing a 3.1% rise in building approvals. The trend for building approvals is a steady rise over the past 12 months. In the year to March, residential building approvals were up 3.8%. Commencements have been trending upwards over the past six months or so – NSW, Queensland, Western Australia and the Northern Territory have all recorded annual increases in building commencements.

“FACT: Over 1 million Australian workers in building and construction watch helplessly as building keeps falling, knowing their jobs are at risk.” This is not a fact, either. It’s a piece of sensationalist speculation. Does the HIA claim to know the mind of every worker in the industry? I know many people in the building industry who are optimistic. In many parts of the country, building is booming (including in Perth, Darwin and many parts of Queensland) and workers do not share the HIA’s entrenched pessimism.

“FACT: Severe drops in new housing have forced many manufacturing and small businesses to close with risks of further layoffs.” As described earlier, building approvals have risen nationally. Where are the severe drops in new housing taking place? Certainly not in central Melbourne, nor in Perth, nor Darwin, nor the Toowoomba region, nor the Hunter Valley, nor Gladstone, nor many other parts of Australia. This is empty rhetoric, unsupported by “facts”.

“FACT: Taxes, levies, fees and charges account for 40% of the cost of a new home.” This is one claim by the HIA that has some validity. Studies have found that approximately 40% of the cost of a new house is made up of government taxes and charges, but these are HIA figures. To be credible, the association needs to explain, in detail, how those figures are made up. The association has a history of rubbery figures.

“FACT: Australia will need 1.3 million new homes built by 2020. At the current rate of building, more than 150,000 families will miss out on the home they've waited for.” Again, this is a prediction, not a fact. It’s a guesstimate based on economic modeling which has proved faulty in the recent past.

The HIA also claims in its press release material that there are growing rates of unaffordability, yet its own quarterly index records eight consecutive quarters of improved affordability.

The HIA calls on governments to act. It does not, however, say what it wants government to do. It simply implies that all the issues are the fault of politicians.

Government red tape is part of the problem but it’s not the whole problem.

Nor does the HIA say what it and its members plan to do. Apparently they’re helpless and clueless. It claims a chronic shortage of housing – why are its members not frantically building new dwellings?

Until the builders and developers who are members of this impotent organisation acknowledge they are part of the problem and propose solutions from within the industry, the HIA will remain the most dormant, frustrated and pointless body in the property industry.