Affordability Deception

There are many so-called research reports in Australia which do a very poor job of providing useful, accurate, credible information to consumers – but the worst of the worst is a report called Demographia which pops up once every year to misinform Australians about affordability.

This report, which is a shameless propaganda exercise by a developer lobby group, sets out to portray Australia as a place where no one – and I do mean no one – can afford to buy real estate.

The lobby group is apparently trying to convince governments across Australia that the development industry is over-regulated and that this over-regulation is causing unaffordable housing everywhere – and I do mean everywhere – in Australia.

This ridiculous report has been claiming for 20 years that the whole nation of Australian is unaffordable.

And the latest edition of the report claims that significant chunks of Australia are and I quote, “impossibly unaffordable”.

Now, think about it for a moment. If this was true, no one could afford to buy homes in Australia at all. Because, essentially, that’s what they’re claiming - that no one can afford to buy real estate.

Clearly, that’s a ridiculous and preposterous claim because all over Australia there is a high level of sales activity and prices continue to rise in most locations.

The latest official lending figures show that loans to owner-occupiers, to first-home buyers and to investors have all risen substantially in the past 12 months.

There is high demand for homes and for investment properties and the high level of sales is causing prices to rise in most locations.

Now, none of that would be possible if the Demographia report was credible and accurate – because it says the whole country is unaffordable.

Indeed, it says our major cities are the most unaffordable in the world.

But here’s the thing – the report doesn’t cover the world. It only compares Australia will a tiny proportion of the nations on the planet.

There are over 200 countries in the world – and how many are included in this report? Just seven. Australia and six others.

And yet it maintains that it can justify the claim that Australian cities are the most unaffordable in the world.

Now, if common sense prevailed, you and I wouldn’t even be aware that this report exists because it’s so implausible and lacking in any merit whatsoever.

But we DO know about it because news media in Australia doesn’t care about ethics or accuracy or fairness or credibility.

Journalists, sadly, care only about the headline and don’t care that the information on which the headline is based is patently, blatantly and obviously false.

Michael Bleby, who apparently is the Deputy Property Editor for the Australian Financial Review, was happy to report that Sydney, Melbourne and Adelaide are all “impossibly unaffordable” and ran the headline “Impossibly unaffordable housing a social risk”.

Bleby stated that Sydney is the world’s second-least affordable city for housing, based on the content of the Demographia report.

Now, I’m assuming that Bleby has seen the report, because it would unprofessional and unethical in the extreme to make such claims without looking at the evidence.

So I can only conclude that he doesn’t care too much about the substance of what he is writing, so long as it generates clickbait.

News Corp journalist Aidan Devine put his name to an article that stated that three of our capital cities were ranked in the top 10 most unaffordable housing markets in the world – and then claimed that Australia was the least affordable housing market in the English-speaking world.

So these journalists and others were happy to make these outrageous claims despite what the facts show us.

I’ve read half a dozen different articles on this and only one of them mentioned, briefly, the small number of countries in the report.

In Sydney, claimed by the report to be “impossibly unaffordable”, there were 73,290 homes sold to buyers in the past year. And the median house price rose 8.2% in the past 12 months, according to CoreLogic.

In Melbourne, also claimed to “impossibly unaffordable”, 86,200 homes changed hands in 12 months, with house prices rising 2%.

And in Adelaide, which is actually one of our most affordable capital cities - but also dubbed “impossibly unaffordable” by this shameless document - over 20,000 houses and apartments were purchased by buyers who were apparently unaware that the homes they were buying were utterly unattainable.

And Adelaide house prices rose 14.3% in the past year, according to CoreLogic.

So, if they were impossibly unaffordable before, they must be catastrophically unreachable now, after a further 14% increase in prices overall.

Clearly the report on which all that media hot air is based is laughably and demonstrably rubbish.

But you can sure that this time next year it will pop up again and come up with new sensationalist claims that aren’t supported by any scientific evidence – and our hopelessly shabby news media will be happy to publish it, because they don’t give a toss about providing you with real information and useful data.