Supposed 'dire lack of confidence' in property markets complete nonsense: Terry Ryder

Supposed 'dire lack of confidence' in property markets complete nonsense: Terry Ryder
Supposed 'dire lack of confidence' in property markets complete nonsense: Terry Ryder

The Housing Industry Association just won’t let up. The voice of negativity in the building industry just keeps pumping out pessimism and then wonders why no one wants to buy new homes.

The latest in the HIA production line of paranoid outbursts proclaims there is “a dire lack of confidence towards housing”. This is nonsense and flies in the face of all the evidence.

Here are the facts about Australian residential property. Loans to owner-occupiers are 6.4% higher than last year. Loans to first-home buyers are up 18.7%. Loans to property investors are up 4.1%, with double-digit rises in Queensland, Western Australia and the Northern Territory. Rents have risen in six of the eight capital cities this year, including big increases in Perth and Darwin. In the September quarter the home value indexes rose in seven of the eight capital cities.

All these figures indicate a rise in confidence towards housing, a sentiment reflected in the latest MFAA House Price Expectations Index, which I discussed in my column on Tuesday. The index report discussed rising levels of confidence, with three-quarters of survey respondents expecting prices to remain steady or rise further in the December quarter.

There’s only one indicator that’s currently delivering a negative message. That’s the level of purchases of new dwellings. September recorded the third consecutive fall in new home sales.

But this does not reflect “the persistent lack of confidence towards housing in 2012” claimed by the HIA. People are buying homes in steadily growing numbers; they’re just not buying new ones.

If you’re wondering why that is, here’s an answer in three letters: HIA. It stands for Hopelessly Inferior Attitude.

This organisation could be doing so much to help its members do business. There are so many positives to highlight: a strong economy, low unemployment, rising incomes, low interest rates, solid population growth, recovering property markets, a high level of government assistance for people building new homes.

But rather than encourage people to build, this bleak body of bumbling boffins is giving them reasons not to. There’s a crisis. No one can afford it. The industry is in recession. Everyone’s afraid.

There’s no “dire lack of confidence”. There’s an inability of the housing industry to respond to demographic changes and market needs. There’s also a stubborn refusal to admit that the industry has damaged itself by building too many dwellings in the past.

Most of all, the industry with the Hopelessly Inferior Attitude has failed to take any responsibility for its own situation, preferring to carp on the sidelines with fingers pointed at politicians and councils and financiers and the Reserve Bank. Until it recognizes itself as part of the problem, things won’t get better.

The claim by the man with the most Hopelessly Inferior Attitude, Harley Dale, that “households remain reticent to actually make a decision to buy” contradicts all the available evidence. The truth is people are making buying decisions but they prefer established housing, rather than new dwellings.

Why? Because they’re cheaper and the people selling them are emitting positive messages.

The same rules apply to houses as to anything else available in the market place. People will buy if you provide a product they want at a price they can afford and are encouraged to spend by optimistic marketing.

Terry Ryder is the founder of hotspotting.com.au and can be followed on Twitter.

 

Terry Ryder is the founder of hotspotting.com.au and can be followed on Twitter.

Terry Ryder

Terry Ryder

Terry Ryder is the founder of hotspotting.com.au.

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