Real estate industry only has itself to blame for holding back first-home buyers: Terry Ryder

What will it take for the real estate industry to be satisfied?

 
It’s doubtful there’s been a time in the past 10 years when the industry has had it this good.

 
Interest rates at historic lows, sales volumes rising, housing finance increasing month by month, building approvals trending strongly upwards, grants and stamp duty concessions to people building new homes, affordability the best it’s been since 2003 and confidence rising – it’s an almost perfect set of parameters for service providers to make money.

 
But the industry is still complaining. I say that with a sense of disbelief that a sector with so much in its favour still thinks it has legitimate complaints.

 
The welfare mentality in the industry borders on the pathetic.

 
I didn’t think anyone could challenge the Housing Industry Association as the greatest malcontents in real estate, but the Real Estate Institute of Australia is giving it a good try.

 
Interest rates are the best they’ve ever been but the REIA is demanding more cuts from the Reserve Bank.

 
There are a couple of issues I have with that. One is that the boffins at the institute clearly think interest rates are the dominant influence on property markets. All the available research contradicts that notion. Rates are a factor, but only one of many. There have been many periods in the past 50 years when markets have thrived in a high rates environment and others where low rates have failed to stimulate activity.

 
Another issue if that the REIA leadership apparently believes that the key consideration for RBA board members in making interest rates decisions is the wellbeing of the real estate industry. I doubt the RBA gives more than a moment’s thought to hard-luck stories from real estate agents. They have far greater considerations to ponder than the trading of houses and apartments.

 
But the bottom line is that we’ve never been so well off when it comes to housing finance. Not only is the official rate extremely low, but multiple lenders are competing to provide attracting mortgage products.

 
Another recent REIA press release complained that first-home buyers need more encouragement. They already have plenty of help and it’s really up to individuals to take action. It’s probably not going to get any better than this.

 
The real estate industry has shot itself in the foot, the other foot and both hands, with its constant stream of negative comments about affordability and the alleged plight of first-home buyers.

 
The HIA (which greeted the news that building approvals are up 28% in the past year with yet another negative press statement) has led the way, with Master Builders Australia and the REIA close behind.

 
The theme of their messages, gleefully regurgitated by the media, is that young people just can’t afford to buy homes. And potential first-home buyers appear to have accepted that as fact, without even giving it a try.

 
The reality, as demonstrated by ABS, is that housing costs (as a portion of household income) are no higher today than in 1995. And housing affordability now is the best it’s been in 10 years, according to the quarterly report published by the REIA itself.

 
The main thing holding back first-home buyers is the perception that it’s all beyond their reach. And for that, the industry only has itself to blame.

 
The ingrates of real estate should stop pleading for handouts and start taking advantage of the best market conditions in 10 years. 

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Terry Ryder is the founder of hotspotting.com.au and you can contact Terry via email or on Twitter.