Luci Ellis, the Australian Reserve Bank’s head of financial stability, addressing a Sydney University urban planning forum, says housing crashes do not increase affordability. “Housing prices are lower, yes, but capacity to pay is also lower,” she notes.
Professor Kirk McClure of the University of Kansas, while noting the U. S. and Australian economies are different, the lessons are the same: Even after the housing-driven financial crisis, the U. S. is building more homes than it has households to occupy them, according to aunews.yahoo. He says, “The industry is very good at building, it unfortunately is not very good at reigning itself in when it reaches over-built condition. Once they are built it’s real hard to work out an overhang.”
The take away for Australia is the need for growth management. The Reserve Bank says while there is a housing shortage in Australia, it warns of over building dangers in some regions, especially Melbourne, where an apartment building boom is currently underway. As MHProNews understands, building associations have called for a relaxing of regulations and the release of more land, but Australia’s Reserve Bank is concerned about oversupply. ##
(Photo credit: aunewsyahoo -Australian manufactured housing community)
