Media Fails to Challenge Affordability Rant

Posted on 8/03/2016  
Media Fails to Challenge Affordability Rant

By Terry Ryder

It’s another rant from the lunatic fringe and it should be given no credibility.

But such is the state of Australian media that an irrational and politically-charged “report” titled Sydney and Melbourne’s Housing Affordability Crisis – No End in Sight has been given widespread coverage.

It seems that anything that provides a cheap, easy and sensational headline will be given major mileage, no questions asked.

The authors of this document are Bob Birrell and David McCloskey from the Centre for Population and Urban Research. Evidently this pair of activists doesn’t feel the need to adhere to academic standards and write a balanced, rational and impartial report based on research evidence.

Instead they make wild claims and sweeping statements which are not supported by research data.

The document claims, in effect, that all affordability problems have been caused by investors and negative gearing. It doesn’t produce any evidence to support this sweeping claim, perhaps because the evidence does not exist. Negatively-geared investors are about 15% of the market and to suggest they alone drive prices is irrational.

It claims median home prices in Sydney are 12.2 times median households incomes but the true figure is 8.8 times.

The report uses the strident, emotional language of a political slanging match to claim that “governments have abandoned the current generation to a lifetime of rental properties” and that we have “a social catastrophe”.

There’s a claim that Sydney’s prices “are among the highest in the western world” but there is no evidence to back the statement.

There is also the outlandish claim that because Prime Minister Malcolm Turnbull doesn’t agree that negative gearing is the problem, his “stance reveals a monumental insensitivity to the social catastrophe …”

It also claims “the Coalition Government has its head in the sand”.

Here’s a relevant question that the report doesn’t answer and the journalists failed to ask. If negative gearing drives prices through the roof, why have there been no price booms in Brisbane, Adelaide, Perth, Darwin, Canberra, Hobart and most parts of regional Australia?

 

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