With boom times returning to WA, the housing market is once again overheating. The median house price in Perth is now $512,000, according to the December quarter figures from Australian Property Monitors, putting it beyond the reach of any new homeowner without substantial savings or parental support.
It is not difficult to pinpoint the cause of this price escalation.
During the second half of last year, new lots approved for building in Perth and Peel were running at an annual rate of under 9000. This is extraordinarily low. Even in the mid 2000s, when supply was being far outpaced by demand, annual new lot releases were running at more than 15,000.
The reasons for this were shown to lie squarely with the Government's land-starvation policy. The Government just won't allow enough blocks to be developed for housing, thereby preventing competition from driving down prices.OK, so we have Western Australia. The most remote least populated area on earth, barring the two poles. All that land, just waiting to be put to use.
This has stemmed from unfounded fears of the high cost of providing new infrastructure, a mania for central planning and groundless opposition to urban sprawl in a State that has more natural bush and farmland than anywhere else in the world.
Government resistance to allowing land to be used for housing has also been abetted by ministerial dreams of creating a compact city with teeming inner suburbs populated by bohemian theatregoers and by downright contempt for new-homebuyers' preference for McMansions on individual lots.
But they're not allowed.
So yes, there is a shortage of houses. And no doubt, the government might spin that and say, look, we're going to build a bunch of new houses! In urban areas, so we can all be bohos! But, as with the Credit Crunch and every other damn thing, they were the cause of the problem in the first place. They created a shortage of houses. And they will make it worse with their so-called fixes.