The Housing Industry Association (HIA) today issued a report “Land Slide Signals Further Home Building Weakness Ahead”.
“Residential land sales fell for a sixth consecutive quarter in March 2011, signaling the prospect of weakening levels of residential construction through to at least the December quarter this year.
The HIA-RP Data Residential Land Report provided by the Housing Industry Association, the voice of Australia’s residential building industry, and RP Data, Australia’s leading property information and analytics provider (sic), found the volume of land sales fell to a record low in early 2011. Sales were down by 6 per cent over the March 2011 quarter and were 43 per cent lower when compared to the March 2010 quarter.”
The most important thing to come out of the whole report was that anyone would have to query RP data as “Australia’s leading … analytics provider”.
Karl Fitzgerald and I (representing Prosper Australia and the Land Values Research Group) had an appointment with the HIA’s Caroline Lawrey on 30 August 2007. We suggested there was bad news ahead for the Australian property market – housing construction in particular – and we’d be happy to provide, gratis, data and some suggested action the HIA might take to avert or, at least, minimise any housing collapse, at another meeting with the HIA’s then boss, Ron Silberberg.
Caroline received us well and agreed to get back to us. We didn’t doubt her good faith, so, when she didn’t get back, we assumed it was by direction from ‘up top’.
I spoke in a radio interview about a year later with the HIA’s Canberra policy officer, Chris Lamont. He seemed pleasant enough, too, but didn’t seem to be abreast of any impending housing collapse.
How could he be? The HIA have fastened themselves to RP Data, one of Australia’s more prominent property bubble deniers. ‘Leading analytics provider’? Bah!
Prosper Australia has also tried to put a case to the HIA’s chief economist, Harley Dale.
So, it was with a sense of resignation I sent the following e-mail to the HIA today about its report:-
This is news? But we’ve been telling Harley Dale this depression has been coming from a long way off – and proposing the only real solution to the HIA – the same remedy Ken Henry’s panel has suggested …. abolish many taxes and apply a land tax to keep the lid on land prices to keep land affordable.
If we don’t do that, it’s only going to get very much worse and – what? – the HIA is going to continue documenting the descent into chaos without promoting the remedy? That’s strange!
I mean, will the HIA actually represent its constituents, or simply provide a running account as a litany of builders continues to go broke as the bursting bubble worsens?
“People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.” – Adam Smith (1723-1790)
2 thoughts on “THE HOUSING INDUSTRY ASSOCIATION [SIGH]”
Yes. RP Data’s data does have saving graces, Cam, but that’s the easy part. I was criticising its woeful interpretation and analysis.
A few points.
1. RPdata-Rismark are very good at providing data. Their weakness in in the interpretation and analysis.
2. Even if a proper land tax regime was introduced, it would take quite some time to phase in, and would not arrest the decline in building activity in the near future.
3. Most lobby groups have no idea about economics and simply lobby to continue doing what they have always done – thye’ve been known to oppose policy changes that would benefit their own constituents.
So, I guess this is just par for the course. Unfortunately home building is a huge employer, so dramatic declines in activity are socially and economically quite disruptive.
Anyway, nice read as usual.