Construction boom yet no room in the Inn.

To read the original version of this comment in the original context at Macrobusiness.com.au click this link. (link maybe locked – but there is a free trial available)

Archive Footage: Posted to Glass Pyramid on 21 March 2015

As yet there has been no serious explanation as to how the rental vacancy rates right across the country remain extremely tight nothwithstanding an agreed boom in negative gearing based investment.

Those low vacancy rates confirm that even now there remains a severe shortage of available property.

Even the alleged ‘butter mountains’ of holiday houses, properties kept off market by hygiene freaks and grannies spare bedrooms do not explain how there is an oversupply of houses yet an undersupply of houses available for rent.

What does explain the low vacancy rate are construction rates that cannot keep up with the population growth rate.

A slower population growth rate is the real solution for those who are obsessed that we build as few new houses as possible.

Of course this demand and supply driven fiasco will probably lead to a recession that will drive down migration but in that circumstance I would not be surprised that construction will collapse and there will still be a shortage.

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