The dire warnings of housing shortage calamity continue — apparently from experts who have severe difficulty counting. That and their own vested interests in ensuring that a myth is perpetuated. According to a report released last week by the Housing Industry Association (which is effectively the union for builders), there is “a need for 466,000 new homes to be built by 2020. The gap currently stands at 109,000 homes.”

Ironically, the previous day, The Age reported that “builders began work on 14,066 new homes in Victoria in the last three months of 2009. This is easily the highest figure in 25 years of records.”

Despite the ostensibly good news, the usually percipient Tim Colebatch found a negative spin, noting that “if sustained, this level of activity would lift Victoria’s housing starts beyond 50,000 for the first time, enabling it to start closing the gap with the state’s population growth — last estimated at 114,000 a year — and reduce the pressure on housing prices.”

Colebatch made the unusual error that many so-called housing experts commit — forgetting that on average, 2.6 people live in each house. That means, if 50,000 dwellings are constructed, that would provide shelter for 130,000 people — that means there isn’t a shortage at all, but rather a surplus — as has been the case for pretty much every year in the last two decades other than last year. Further, it is likely that immigration levels are already tapering off, led by a drop in Indian migrants, partially as a result of violence but more likely due to the Australian Government’s tougher stance on visas.

In today’s Fairfax papers Colebatch was far more sombre on house price levels, noting:

Melbourne house prices have trebled since 1997, not because our incomes trebled, but because we paid those prices by a massive increase in debt. In the 20 years to January 2010, household debt to the banks grew 10 times over, from $118 billion to $1224 billion. As a share of our disposable income, they more than trebled, from 45 per cent of what we earn to 156 per cent.

If we want house prices to keep growing at that pace, we’ll have to keep going deeper into debt at that pace – to more than $4 trillion by 2020, or more than three times our income. Any volunteers?

But back to the misreporting of Australia’s so-called housing crisis, which even extended to the nation’s leading financial newspaper, The Australian Financial Review. Ben Hurley last week chose to accept questionable data provided by RP Data with regards to median rents in ‘top end’ suburbs. Hurley noted that:

The national squeeze on rental accommodation has extended to the top end as wealthy executives shift their families to Australia to capitalise on strong employment growth and skills shortages.

Agents in Sydney and Melbourne say prestige rental properties prices above $1,500 a week are being seized before hitting the market, and parties are bidding up priced by hundreds of dollars.

RP Data had provided information regarding median rents, noting that the median rental amount for East Melbourne in Victoria was $1,000. However, these figures appear substantially higher than the sample in Realestate.com. Based on 63 listed properties in East Melbourne, the median rental price is $500 per week – around half the alleged figure compiled by RP Data. RP Data’s median rental for East Perth appears even more distinct from reality.

Based on 182 listings (a substantial sample size) in Realestate.com, the median rental price for East Perth is $550 per week – less than half the $1,200 weekly rental alleged by RP Data. Similarly, RP Data’s median price of $595 for Glenelg in South Australia appears well above the median on RealEstate.com of $480 weekly.

Crikey attempted contacted RP Data on multiple occasions to gain an understanding of how they obtained their median rental data however, RP Data did not respond to Crikey’s repeated inquiries as to how they prepared what appears to be incorrect results.

It is no wonder that many Australians continue to believe in the housing myth — our media and data agencies aren’t even able to get their facts straight.