Why does it keep being used?
An article in The Age today about Victorian house prices being flat for the last four years. I've written many times about the Melbourne housing market being troubled during that period, decoupling from the price growth around the rest of the country.
The usual suspects for cause are mentioned, such as the punishing investor land tax and rental rules regime. These are contributing factors, in addition to the general economic malaise which currently afflicts the State.
But the article goes on to make the "at least we aren't as bad as NSW" comparison, ostensibly to illustrate that Victoria is doing something relatively right. But the problem, not dissimilar to the Housing Accord Targets, is that it adjusts home building to the rate per 1000 (existing) persons. The chart presented looks stark.
📈Yet Victoria's population has grown at an average of around 1.9% p.a. for the last decade, compared to ~1.3% for NSW. Despite currently having roughly 1.5 million fewer people overall today, VIC grew by around 14%, or 140k persons more over those 10 years (~985k vs ~1,124k).
So the correct measure is the number of new dwellings per extra head of population. And properly adjusted for growth, Victoria doesn't look nearly as crash hot.
The article also makes the mistake of comparing the supply pipeline to the Housing Accord target, which I've demonstrated is incorrect – and even the current projection is too optimistic based on recent commencements.
🤔The truth is Victorian housing policy has gone backwards, losing the State's natural advantages for delivering #housingsupply.