Let’s give thanks for what we have

The Advertiser - Real Estate - - House Hunter - AN­THONY KEANE

HOW lucky are we? We have plenty of things to give thanks for dur­ing this su­per-long long week­end and one is our real es­tate mar­ket. While for some the mar­ket may seem stuck in neu­tral right now, on other lev­els it’s purring like a con­tented kit­ten.

First, the bust that never hap­pened here but smashed most of the West­ern world. US house prices slumped by more than 30 per cent and some US states, such as Florida, had price falls of more than 60 per cent.

In Dublin, house prices are down 53 per cent from their 2006 peak while Lon­don’s prices fell more than 20 per cent.

Ade­laide’s me­dian house price in 2006 was $287,000 and to­day it’s $410,000.

But some fore­cast­ers say we’re head­ing for a fall.

Ade­laide was ranked among the world’s most un­af­ford­able cities in a re­port re­leased in Jan­uary by De­mographia.

It was less affordable than New York, Wash­ing­ton, greater Lon­don and Toronto but slightly more affordable than Syd­ney and Mel­bourne. I don’t be­lieve there’s a bust com­ing – partly be­cause the thought of it fright­ens me silly and partly be­cause eco­nomic fun­da­men­tals here are dif­fer­ent from over­seas.

Prices crashed else­where be­cause sup­ply grossly ex­ceeded de­mand.

Spec homes popped up ev­ery­where dur­ing those coun­tries’ prop­erty booms last decade but there was no­body to live in them.

Aus­tralia has a hous­ing short­age of 16,800 dwellings this fi­nan­cial year, ac­cord­ing to the Hous­ing In­dus­try As­so­ci­a­tion, which pre­dicts that short­age will rise to 21,000 dwellings in 2011-12.

Our rental va­cancy rates are about 1 per cent so there’s no short­age of de­mand there.

In the US, real es­tate in­vestors who watched their prop­erty drop in value could sim­ply hand their keys back and the bank would have to wear the short­fall.

Not so here, where the bank can take your other as­sets – even your own home – if you de­fault on an in­vest­ment loan.

On a state level, our prices are still the most affordable in main­land Aus­tralia and our rents are the low­est, mean­ing we re­main very at­trac­tive for in­vestors and buy­ers if things go pear-shaped else­where.

De­fence and the min­ing boom have given our econ­omy and em­ploy­ment out­look a bright fu­ture.

On a so­cial, global level, all Aus­tralians are lucky when it comes to prop­erty, whether they’re own­ers, in­vestor, renters or even pub­lic hous­ing ten­ants.

On a 2003 camp­ing trip through Africa, my wife and I vis­ited some town­ships where the houses were made from card­board boxes.

One home, made al­most solely from Omo de­ter­gent boxes, is stuck in my brain for­ever.

In an­other card­board house, we asked t he smil­ing owner what hap­pened when it rained. ‘‘It never rains,’’ he replied.

Proudly show­ing us their homes and dec­o­ra­tions, these peo­ple knew noth­ing of me­dian house prices, hous­ing short­ages and prop­erty in­vest­ing. And they didn’t care.

We cer­tainly have a lot to be thank­ful for.

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