Hey guys,

It's not long now, just 4 days before my wedding.

I was reading the papers in Australia today where they had mentioned about a housing shortage they have in Australia. They are only building 150,000 houses this year. The article mentions that more housing is needed if Australia is to keep up with demand. They didn't give an ideal figure but the stark contrast is this:

Australia is only building 150,000 houses this year yet the UK is only building around 110,000 in 2008. That's 40,000 less than Australia.

Australia's population is around 20 million people, the UK population is around 65 million people. So the UK should be producing around three times as much housing in the UK. The UK is not even close.

Now there are other factors at play but the stark contrast is that in the UK the supply side of the economic coin says that we are simply nowhere near building enough houses to meet the demands of the population. The government target was set in 2003 at 250,000 per year, which has never even been close to getting reached.

Basic economics say that lack of supply and increasing demand will drive prices upwards.

So for one minute assume we are out of the current credit crunch and liquidity problems and you might start to see that we have serious (and I am meaning serious) problems with the supply side.

Once the present lack of demand goes away I think prices will skyrocket again. Great news for property investors and an awesome opportunity for those who have seen their pensions fail to regain some of their retirement funding.

Live with passion,

Brett Alegre-Wood