All my recent Facebook posts have been about picking on institutions, the media for their hysterical reporting about house prices, the Reserve Bank for rampant interest rate rises, and Queensland for its lame attack on the housing shortage.
Well, I’m not about to stop now but thought it a bit unfair to single out Queensland’s approach to the housing shortage when it is something that is happening Australia wide. To analyze the data in a way that doesn’t single out any state or political party I decided to extract data from the Australian Bureau of Statistics (ABS) and not rely on media reporting. I also decided to cover a period of the last 20 years of housing construction in both the private and public sectors. Nor was I going to single out any dwelling type, so all types of residential dwellings are included. To balance the results between the states I decided to reduce the level of construction to the number of units completed per one million people. To avoid any bias due to inflation, there are no costs involved in the analysis, just dwelling numbers completed. Housing starts or near completion are not included and neither are dwelling numbers or costs associated with renovations. The numbers are not seasonally adjusted or adjusted for trends of any type and represent the number of residential dwellings completed per quarter from January 2003 to September 2022.
My first step was to graph the results to see if there were any anomalies that might affect a fair comparison and as it turned out there is. Public Sector housing construction had been below 50 dwellings per quarter for the whole 20-year period except between the second quarter 2010 and the second quarter 2012. During those two years dwelling completions reached an all-time high of 200 units averaging over 100 units per quarter. For the purposes of comparing one period of construction to another, I have excluded this period as a statistical anomaly.
In the Private Sector, dwelling completions typically averaged between 1,500 and 2,000 units per quarter but with some relatively short-term peaks in the period 2016 to 2018. The peaks were not statistically significant and have been ignored.
Before I go any further, does anyone see a problem here. The Queensland Government alone is saying they are 50,000 homes short in the public housing space and yet in the whole of Australia we are only building an average of 50 homes per quarter. Now I failed mathematics in school, but you don’t have to be that bright to know this is a problem and you don’t need a Royal Commission to figure it out (or do you?).
When I analyzed public sector housing, I compared the average completions in the first 7 years (to exclude the peaks in 2010/12) from 2003 to 2009 with the average over the last 5 years. I decided on this 5-year period because it was in 2017 that it was becoming patently obvious that we were heading for a housing boom any economist (or Government) worth their salt would have had time to react to what eventually became a reality. It also happens to coincide with the period all State Housing Ministers didn’t bother to meet and discuss the issue everyone else saw coming. Four years they all sat on the duffs and did nothing, all of them. The results in the image attached are obvious, except for Tasmania public sector housing construction has fallen dramatically from the levels of 20 years ago and those numbers take population increases into consideration.
Looking at the private sector the results are a little bit more acceptable. With no peaks in previous years to worry about I compared the average build in the first 15 years to the last 5 years. Western Australia and the Northern Territory are the worst performers with Queensland and South Australia both in negative territory. Remember though, this is private sector housing and growth in this area doesn’t do much to help the socially disadvantaged. If governments are waiting for the private sector to step up and fill the void, they are going to be seriously disappointed, and so are the families forced to live rough.
I am sure that in the long term we will all appreciate the money state governments, and the Federal Government are pouring into freeways, rail, airports, bridges, and tunnels. The bridges at least will provide some shelter for the homeless.
I have my view on who to blame and I’ll be telling them exactly that when I vote!
