You may remember an article in Business Spectator earlier this year. It was by HSBC economist, Paul Bloxham, on the Australian housing market titled, The Australian Housing Bubble Furphy.
Bloxham argued Australian house prices were justified because:
- The quality of Aussie housing is high
- The supply is limited
- Public transport from outer suburbs is poor
- And there’s a lack of cheap land at the fringe of major cities
It was the first point we had the biggest problem with.
Because it wasn’t supported by a jot of proof. Bloxham argued:
“First, the quality of the housing stock is high. Australia has the largest dwellings in the world, and they are of high quality. Estimates suggest that the average Australian dwelling is 214 square metres, and the real expenditure on new dwellings is now 60 per cent higher than it was 15 years ago, reflecting the increase in both the size and quality of dwellings.”
To our mind Bloxham had confused quantity of housing (the size of houses), with quality of housing (how good they are).
As you’d expect, the spruikers loved Bloxham’s article. It was the most syndicated and copied housing article of the year. It even spawned the famous “marvellous water views” comment from Fairfax journalist, Jessica Irvine.
In the Sydney Morning Herald, Irvine wrote:
“Compared to the rest of the world, we have high quality housing stock, with a high proportion of solidly constructed houses on big blocks. Most of the population is concentrated in a few capital cities with often marvellous water views.”
Again, there was no proof that Aussie housing was high quality. There was no reference to global housing studies… nothing from the Housing Industry Association… not a word from the millions of scholars around the world who clearly haven’t compared Aussie housing against housing in the U.S., U.K., France or Senegal.
Call us an old stick-in-the-mud. But when we see groundless claims we want to find out more… We want proof. Or at least an admission the argument has at least some subjectivity.
It’s a standard we set for ourselves… and we expect it from others. We call it the Bulls#!t Test. Whenever we read something (even if we’re inclined to agree with it), we take the view the writer is wrong. It’s up to them to convince us they’re right.
So imagine what we thought this morning when we saw this story in the Age:
“Heavy rainfall after a decade of drought is thought to have caused cracking in the walls of hundreds of new homes in Melbourne’s west, sparking calls for an overhaul of building standards from within the housing industry.”
The report continues…
“Affected suburbs include Melton, Werribee, Hoppers Crossing, Tarneit, Truganina, Deer Park, Point Cook, and Caroline Springs.”
Most of those suburbs have one thing in common. They’ve seen huge building growth over the past 30 years. In other words, these are the bigger and better houses the mainstream says are proof of high quality Aussie housing.
So based on this report, it seems your editor was right again.
The reason the mainstream didn’t provide proof about the high quality of Aussie housing is because there wasn’t any proof. Aussie housing isn’t better than any other Western nation… it’s just bigger. And bigger ain’t always better.
[Ed note: by the way, we're not having a pop at the suburbs. We're not some latte-sipping inner-city sort who hates suburbanites... OK, we sip lattes, so forget that. But we have lived (and still do) in the suburbs for most our life... and we like it there.]
All the while, one-by-one the excuses to support high Aussie house prices are knocked down and fail the Bulls#!t Test. Aussie houses aren’t of better quality. And despite the millions spent by the Australian federal government on three State of Supply reports, there’s still not one jot of proof to support the “housing shortage” claim either .
Cheers.
Kris
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December 22nd, 2011 at 9:29 pm
My friend is a painter, He tells me that some new homes already have cracks in the wall’s before he even gets to paint them !
December 23rd, 2011 at 9:58 am
Ben if construction quality was low, all of the NEW homes in the path of Cyclone Yassi in Nth Qld would have blown over, but they didn’t – they stood firm.
Of course the build quality is good, and a few cracks in the internal dry walls just mean that the plasterers rushed their work, and will have to come back and repair it.
It doesn’t mean they will fall over.
December 23rd, 2011 at 10:08 am
The house i,m living in has a large crack right across the floor, the ceiling is moving too. New ( last 20 years) aussie houses are pretty shoddy. The old queenslanders were the best.
All new house owners i speak to say they would never do it again.
December 23rd, 2011 at 9:43 pm
In Europe houses are build on a concrete base, concrete pillars and floors. The walls are made of thick and strong tiles.
In comparison the majority of the Australian houses are made of wooden stick in the mud, construction made of sticks, floor made of wood. Even though are cheap to build they will not last very long, and will require lots of maintenance. And most importantly cost more than equivalent/similar size houses in most European countries.
December 24th, 2011 at 8:13 am
As a young man I worked in the construction industry, what I have witnessed over the last 15 years is the rush of dubious builders into the housing scam and the now inferior quality of a lot of young tradesman. It appears to me that the almighty dollar has taken over the principle of quality of tradesmanship. Recently I completed building a factory and was satisfied in doing this myself, even where I utilised tradesman I found that I still had to repair parts of there work…..why did I not get them to come back and fix it…well if they can not do it right the first time why would it be better the next…and I saved all grievances.
December 26th, 2011 at 10:12 am
Well my house is well built, the two houses that I built before this one were well built, you guys must attract the lemons.
January 31st, 2012 at 5:41 pm
Most Aussie houses are large but lack quality.
If a strong hurricane came in Brisbane hardly any newly built home will be spared. Flooding is a real threat in many areas,more than we have seen. Termites are real threat.
Many areas are in earthquake zones ,hope they don’t become active. Any house in a standard subdivision should not be worth more than three hundred thousand dollars. Just unbelievable Council and building costs.
Sagar.