Housing shortage faked to drive up prices

Citizens Electoral Council of Australia

Media Release 13th of April 2010

Housing shortage faked to drive up prices;
Isherwood demands HBPB

There is no housing shortage in Australia; rather, tens of thousands of empty homes in each capital city are being kept off the market to force property prices up, and sucker investors into becoming debt mules as they race to get into the market.

Citizens Electoral Council leader Craig Isherwood today blasted the fraud: “The faked housing shortage is driving Australia’s homelessness crisis, housing affordability crisis, and exploding debt crisis.

“Either the government stops the fraud, and reorganises the economy in an orderly way along the lines of the Homeowners and Bank Protection Bill (HBPB), or the housing bubble that is entirely based on this fraud will soon blow, and there will be chaos,” he warned.

The faked housing shortage is the foundation of the impression that Australia has experienced an economic recovery:

After falling six per cent between 2008 and 2009, median property prices in Australia have skyrocketed 12 per cent in one year, and 18 per cent in the hotspot of Melbourne, on the back of the First Home Owner Grant scheme and the hyped-up fear of a housing shortage.

Tabloid media outlets have fed the masses reports of a property-based recovery, and promised property prices will double from $500 thousand to $1 million in less than a decade, urging investors to “get in early”.

The result is a self-fulfilling prophecy, as panicked investors flee into the market, driving up prices in the huge property Ponzi scheme.

In turn, Australia’s banks, which are all heavily exposed to the property bubble, are denying small business the credit they need to survive, but are tripping over themselves to throw money at property investors, including actively encouraging home owners to tap into their rapidly-rising equity to splurge on big-ticket items like new cars and holidays, which is driving up consumer spending, but all based on debt.

Property “hoarding”

All of this, is based on the fraud of a housing shortage: For more than a year, the CEC has received an abundance of anecdotal evidence, that a very large number of residential properties around Australia are sitting empty.

These reports are consistent with the CEC’s understanding of the scale of the wave of bank foreclosures in Australia from 2007-09, as rising interest rates drove hundreds of thousands of Australian home owners into severe mortgage stress.

At the height of the foreclosure wave, it was reported that one caravan park in the northern suburbs of Melbourne was turning away up to 80 homeless families per night! [As reported, Sunday Herald Sun 9th March, 2008, “Rates slug’s new homeless” by Eleni Hale and Kate Adamson.]

What has happened to all of those foreclosed houses?

According to Earthsharing Australia’s I Want To Live Here 2009: Vacancies in Melbourne Report, based on a very comprehensive survey of 652,695 properties across 23 different municipalities in Melbourne, there are 44,753 vacant properties across Melbourne’s inner, western, and south eastern suburbs.

That is a genuine vacancy rate of 1 in 15 properties, or 6.86 per cent, more than half of which are residential houses—and that’s not even all of Melbourne surveyed!

The report states that most of the properties are kept empty for speculative reasons, i.e. to help drive the prices up.

“That many empty properties in one cross-section of Melbourne shows there is no shortage, and the government is party to a fraud,” Mr Isherwood said.

“If the government is allowing banks and big investors to hoard properties to drive up the market, it is another example of them bailing out the financial system and the bankrupt banks off the misery of families who are struggling to pay their mortgage or their rent, or even find a place to live.”

Mr Isherwood insisted this would be fixed with the HBPB: “The HBPB would have stopped families from losing their homes in the first place, put foreclosed families back into their properties, and reorganised the bankrupt banking system so that its function wasn’t dependent upon creating a property debt bubble that deliberately makes housing—a fundamental right— unaffordable, in order to feed the banks’ obligations.

“However, because it wasn’t implemented, we have a terrible housing affordability and availability crisis, and are deeper into the global economic breakdown crisis.

“All that new debt that is being piled up to create the impression of a recovery will soon explode, so if people want to survive, they better start listening to the CEC and Lyndon LaRouche,” he concluded.

Click here to sign the CEC’s online statement demanding the government enact the Homeowners & Bank Protection Bill.

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