I was sitting on a plane coming back from London on the late flight and I noticed someone a few seats ahead of me on the opposite side flicking through the newspaper. I hadn’t tuned into the news that day so I was trying to soak up the headlines as best I could to get some hint as to what was going on.
Headlines are quite dangerous because often they are designed to catch your attention and the actual content may not fully reflect the ‘story’ that is portrayed. You only discover this when you actually read the article but often we never get that opportunity as when we are busy we flick the pages of the newspaper and very quickly we start to consume the ‘headlines‘ as the actual stories.
This headline had the words ‘Housing Crisis‘ in it and as it would imply there must be a housing crisis. I have read these words in so much coverage lately that it would be correct in assuming that we have a big ‘housing crisis‘ on our hands.
If you Google the words ‘housing crisis‘ you will get a mountain of listings with many published in the last few days.
When we read the articles you will hear about the lack of supply, small numbers of houses being built, negative equity, repossessions, rising rents, tighter controls over bank lending, NAMA and developers sitting on land banks and a looming homelessness crisis.
For the most part it is all negative rhetoric and that word ‘crisis’ is bring used over and over, so much so that we should all get depressed.
In any other industry if you were to describe this exact set of circumstances we would be using the words ‘opportunity‘ instead:
- There is high demand for the products and lack of supply
- The demographics indicate that this demand will sustain itself into the future
- Prices are rising due to demand but there are also low interest rates and an improving economy
- Employment levels and income are rising
- Fulfilling this demand (10,000 units per annum extra) will create 25,000 extra jobs
- More jobs means more ability to pay, creating even more demand
- Demand will generate income for the government
- Demand will stimulate growth in supporting industries
Why aren’t we using the word opportunity and looking at the upside and the huge positives?
If this was any other sector, businesses would be seizing the opportunities and they would be supported by the banks. If we could create 25,000 new jobs there would be all sorts of supports and incentives on offer by the government.
And what about all of the ancillary products and services? – the carpets, curtains, tiling, fittings, furniture and electrical sales which would come after all of the professional services. That would be a huge amount of economic activity.
When it comes to property we are suspicious, we are fearful it will ‘overcook‘ the economy once again and we feel that any incentives given to consumers will be abused by the developers. It’s an industry that we distrust and the word ‘greed‘ seems to automatically apply because of the excess of the Celtic Tiger, which is still fresh in all our minds.
Despite this negativity around the industry I am very puzzled that no one is writing about these obvious positives so I have a peep at the Construction Industry Federation website to see what they are saying.
I find a copy of a press release dated 4th September 2015 with the heading “Six steps to increasing housing supply and stimulate growth in the economy“.
They could just be right ..
The best way to solve our ‘housing crisis’ is to seize the housing opportunity.