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There may be some worthwhile arguments that suggest Sydney and up-market Melbourne areas are in a housing bubble, but the popularity of home improvement television shows is not one of them.

At an estimates hearing on Monday, Treasury Secretary John Fraser told senators Australia’s two largest cities are showing “unequivocal” signs of a housing bubble.

“It does worry me that the historically low level of interest rates are encouraging people to perhaps over-invest in housing,” he said.

“I’m not talking just about buying housing, I’m talking about investing in housing. You’ve just gotta see a plethora of these renovation shows to realise something’s amiss,” he said.

The high rate of investment activity is a worthwhile conversation to be having, but Mr Fraser is looking in the wrong place if he thinks renovation shows on television are an accurate barometer of the housing market.

Reality TV shows do not accurately reflect reality – that is what makes them good television. They’re certainly symptomatic of national obsessions – Masterchef tapping into foodie culture, The Block revelling in renovations – but they aren’t indicative of market movements.

The Block premiered in June 2003, and has run successfully for more than 10 years. Its producers pull out new tricks season after season. Even if we were to take the ratings card as a reflection of the housing market, his argument doesn’t stack up.

Ratings for the show have not climbed higher than they did when they peaked in season four, in June 2011.

In June 2011, interest rates sat at 4.75 per cent, after the Reserve Bank had hiked interest rates seven times since a cut in April 2009. They had not been higher since 2008.

As the housing market in Sydney and Melbourne did very little between the boom of the early 2000s and the last three years, it’s fairly safe to say that the popularity of these shows has nothing to do with interest rates and speculation in the property market.

The popularity of The Block, arguably Australia’s favourite renovation show, does not suggest that there is a problem.

Australians have always been house proud and the proliferation of television shows merely reflects this national interest. Spending money to improve the home in which you live, to provide yourself a better quality of life, is not speculative overspending in the property market.

Bringing reality television shows into a serious discussion about rising prices and housing bubbles is nonsense.

Given it is the strongest line the Treasury has taken on the tireless housing bubble topic, it would be good to stick to the data and leave television shows out of the equation.


Posted by Jennifer Duke – Domain (The Age) on 2nd June, 2015