ABC News featured this story on Melbourne’s oversupply of homes this week, reporting on expectations the market will only get worse. Residex estimates there is an oversupply of 14,000 homes and expect prices to fall a further five to ten percent over the next year.
Residex CEO John Edwards said “There is far too much stock coming onto the market right now and far too much stock to be delivered into that market given the housing supply situation exists” while Macrobusiness’s Leith van Onselen indicates “New home sales are currently tracking at decade lows despite generous subsidies from the Victorian State Government which are due to expire very soon.”
How times have changed. It wasn’t that long ago, lobbyists were screaming a shortage of homes, one that would keep a floor under prices.
ABC reporter, Neal Woolrich, closes the story with the summary, “Most agree that this month’s 50 basis point interest rate cut will help at the margins, but the underlying problem remains: too much housing and not enough buyers willing to take the plunge in these uncertain times.”
It is a shame the story falls short of mentioning excessive household debt as the real underlying problem.
» House prices continue to fall – ABC The Business, 18th May 2012.
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