While Australia seems to experience a real estate boom, first home buyers face ever more difficulties to buy a property. And with road congestion and climate change increasing, the Napthine government knows no better than building more roads. Whom exactly do we build for and does it make any sense doing so?
Those active in or observing the Australian real estate market will have noticed that already high prices seem to have exploded within the past few months. All this despite of signs that overall, the Australian economy might not do as well as in the past and that late effects of a global crisis might eventually hit our country. That seems a bit odd to understand. Either Aussies are extremely risk-friendly or something else is going on. Living in Docklands and observing a vast number of apartments and houses standing empty even fifteen months after completion, I suspect the latter to be true. And indeed, other people have made similar observations.
A look at statistics shows that while building approvals have increased over the past twenty-two months there are ever fewer first home buyers. Lending practices reveal that house loans form a big part of Australian banks’ business and that certain borrowers (are forced to) take very high risks. That is, however, only part of the picture. With fears of deflation in Europe and the USA, investors look for better options than their own zero interest economies. The fact that even a Swiss newspaper writes about investment in Australia’s property market suggests what can be confirmed when asking around among Asian friends: who is boosting our real estate market are investors from overseas. What is certainly welcome for local construction companies makes life more difficult for the people who live here as much as for local businesses in the production or manufacturing sectors.
There is more to that. In Melbourne there is a trend of people wanting to live closer to or within the city, yet the population increases most where housing is affordable; that is in outer suburbs like South Morang. That in turn brings new challenges such as the demand for additional traffic infrastructure and more problems considering that our government, ignoring society and present trends, insists on projects such as the East West Link, addressing transport questions with a technocratic approach that was typical for the 1950s but not adequate for the 21st century. An article in The Age explains the lack of expertise and coordination in public transport planning in Melbourne. A similar wrong development can be observed in the fact that the way we currently build is not adapted to present and future environmental challenges. We are building for the sake of building, not for infrastructure to address residents’ needs.
With a global environment and daily challenges that ask for ever more complex solutions, it seems not only unfair but is very short-sighted to be building for the interests of a small group of investors and construction companies only. In the end what makes our cities lively and the overall Australian economy going are the people (consumers) who live here. Additional infrastructure (housing and public transport) should address residents’ needs and not those of egocentric politicians or people who live thousands of miles away and for whom Australia is not home but only part of their investment portfolio.
Failing to build for locals may answer certain short term needs but bears a high risk of becoming very costly on the long run – for investors, home owners and society alike.