Australian housing shortage a myth, bears claim

Australia, where home prices are falling at the fastest rate in more than two years, has a glut of properties and is set for a US-style crash, some experts say.

The warnings from tax-reform advocate David Collyer, commentator Kris Sayce and academic Steve Keen contrast with banks and developers that claim a shortage of about 200,000 homes will underpin prices. The housing bears say builders and lenders are pushing flawed government data to keep prices afloat in the English-speaking world’s costliest place to buy a home.

“It’s important for the government and banks to keep the myth of a shortage alive,” said Mr Sayce, editor of Melbourne-based online newsletter Money Morning Australia. “Without it, prices drop, and negative equity results in housing repossessions and insolvent banks.”

More than two-thirds of the government’s shortage estimate arises by including people who can’t afford housing, such as the homeless or those living in trailer parks, Mr Sayce said.

Source: SMH.com.au