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It’s right there before us in yesterday’s census release. And it demolishes the claims of the housing denialists such as Steven Keen and the cherrypickers at The Economist that there’s no housing shortage in Australia. In the five years between 2006 and 2011, rents rose nationally on average just under 50%. That’s more than 30% above inflation. Monthly mortgage repayments rose on average 38.5%.

The biggest rise was in WA, where median rents went up more than 76% and mortgage repayments went up more than 60%. The smallest rise was in NSW, where rents rose just 42%. But that’s because rents there were already the highest in the country outside the ACT, and still are. Dwelling approvals peaked in NSW in 2002 and have been falling ever since, apart from the temporary lift provided by Kevin Rudd’s stimulus programs. That state is now building about half as many dwellings in total as it was a decade ago. The O’Farrell government made its first substantial attempt to redress the issue in its recent budget by switching it first home owners’ grant scheme to new building.

The National Housing Supply Council demonstrated in late 2011 that the gap between housing supply and demand was increasing in Australia and was nearing 200,000 units, but also that it differed across states. The gap was narrowing in Victoria (which has a far stronger record of maintaining housing construction) and South Australia, but increasing in Queensland and worst in NSW. It also explained why house prices have been flat despite the growing shortage.

Despite being a creation of Labor’s, the council’s report received minimal attention from the government, continuing a tradition that sees housing only addressed seriously when falls in affordability are sufficiently severe to make the issue spike into the media. Joe Hockey has occasionally raised the issue, but otherwise political attention has been minimal since COAG quietly abandoned the issue in 2011.

As the council’s deputy chair Saul Eslake has forensically demonstrated, Australia has a long history of policies — chiefly grants to first home buyers — that effectively serve to increase demand for housing and bid up house prices while doing nothing to address supply. And that’s no accident — the interests of the majority of Australians lie with pushing up housing prices rather than making it easier for people to enter the housing market.

The invisibility of the issue is in marked contrast to that of other cost-of-living issues, where the persistent lack of evidence that prices are increasing at anything like the rate incomes are increasing is ignored in favour of a “doing it tough” narrative that all politicians have cravenly pandered to ever since John Howard made the mistake of daring to tell Australians they weren’t doing so badly. And that pandering has been rhetorically and via policies such as middle-class welfare.

The victims of this national myopia are younger people, lower-income earners and particularly those who need social housing, which has seen its own particular slump in construction courtesy of state governments. None of them tend to feature prominently in demographics pursued by the commercial media (although Today Tonight commendably tackled the public housing issue in May). The plain demonstration in the census of the long-term impact of our housing myopia might focus some political minds, but don’t count on it.

Peter Fray

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