Friday, January 04, 2008

Can lies go on forever?

SOS member Adrien Krebs has done some research on the cost of housing. He writes:

In yesterday's Australian Financial Review (2 January 2008) an article entitled Adelaide Steals Perth's Crown mentions that the median house price in Australia in 2007 was $482 601 and that of a unit was $386 873.
So out of curiosity I did a little research and found the median home (I assume house and unit all included) price for the USA in 2007 was $212 000 USD, which roughly equates to $237 000 AUD.

Not including interest rates, which are slightly higher in Australia, the cash price of a home is DOUBLE in Australia of what it is in the USA, the world's wealthiest nation!!

- Is it that the USA have much more land available than Australia? NO. Mainland US covers 7.8 million km2, when Australia is 7.7 million km2. So reasonably the same size

- Is it that Australia has much more people competing for land? NO. The exact opposite is true with only 20 million people in Australia vs. 300 million in the US!

- Perhaps our Aussie homes are made of silver and gold or diamond bricks? NO. When driving through the Sydney suburbs, I mainly noticed sandstone for old and historic houses and mostly bricks for more modern ones, and a few wooden ones.

- The US must be going through a severe real estate crisis! There has been a lot of news about this, but according to the US Census http://www.census.gov/const/uspricemon.pdf the historical record month for Real Estate was April 2007 where the median home price was at $257 000 USD. Still a universe away from our Australian prices.

The American median income is also higher than the Australian one, so I am definitely out of options and can not figure out why a small 500m2 lot of raw land 60 kilometers West of Sydney will sell for the same price as a built house with a garden in the US.

This information is public. When spread accross Australia, lies will not be able to go on forever and people will want answers. What answers will Frank Sartor and our governments provide us with?

2 comments:

Tony2 said...

Unfortunately,we won't get the truth on affordable housing from the Labor or Liberal parties,who have been both supporting the same high density policies in most states for the last 20 years;the very policies which have driven land prices through the roof.They've both got a gentlemen's agreement to hide the truth from the public.Add to that agreement the lightweight planners in the various State Planning Departments thinking they know better than the average Australian what style of housing we prefer to live in,and we have a gigantic conspiracy that even Hollywood couldn't dream up.Finally,with the close financial relationships between politicians,high density developers, and bureaucrats ( who have been leaving the Planning Depts for, no doubt, more lucrative positions with Development companies ), and we may even have illegal cartel like associations that keeps land and housing prices artificially high so that a few can make exhorbitant profits.

Hired said...

Congratulations on discovering Australia's housing bubble is far larger than America's. If you look at the Australian and US censuses you'll find that Australia and the USA both consistently built houses far faster than population growth while claiming there was a shortage. For more info:

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