Real Estate agent schtick

While on the patrick.net theme (following), here is a terrific treatment authored by Patrick Killelea of how the real estate industrial complex convinces people to pay too much for housing: Housing Crash Continues, Bubble Pops

This free market rampage continues unchecked, unregulated and disregarded by our dodgy shyster politicians who pretend to be concerned about everything while doing absolutely nothing about anything.

As reader Sean Olender put it: "Many people have forgotten that their number one restriction on future freedom -- to do what they want, when they want, and to go where they want -- it isn't the Iraqis, or Iranians, or North Koreans, it isn't the axis of evil, it's their mortgage lender."

Renters Gloat Over Housing Slump - Wall Street Journal

An article in the Wall St Journal concerning my good friend and fellow bubblebear Patrick Killelea, founder of patrick.net:

Renters Gloat Over Housing Slump - WSJ.com

The Coming Collapse in Housing

(click to enlarge)

When you look at Robert Shiller's graph of inflation of house prices, adjusted for monetary inflation, over the last 100 years, it seems almost inevitable that there will be a major correction very soon.
Of course, the politicians will just sit back and watch it rise and fall, so they can't be blamed for the outcome of 'irrational exuberance' (although they could be accused of indifference).

The Coming Collapse in Housing

Suffering in silence: a city on the edge of insolvency

Very interesting, NSW 'Labor'. The Joe Tripodis and Frank Sartors clearly really don't care what happens to the average household. The housing 'boom' is partly responsible for this, the subsequent inflation it caused has taken care of the rest.

ONE in three Sydney households is beset by financial worries and almost one in seven is teetering on the edge of insolvency, a church survey has found.

The study commissioned by the Wesley Mission warns financial stress is greatest in the south-west and outer west, but is also pervasive across all parts of the city, including its more affluent suburbs.

Families reported forgoing family activities, borrowing from relatives or friends, failing to pay bills on time or being unable to make minimum credit card payments.

Five per cent said they had had to pawn an item, 4 per cent said they had gone without meals and a similar number could not afford to heat their homes.

The survey of 400 people was carried out in August. Since then last week's interest rate rise - the third this year - has added $40 per month to average mortgage repayments.

Suffering in silence: a city on the edge of insolvency

Homebodies raise the drawbridge to avoid an out-of-control world - National

A telling sign of the times:

IF THE home is our castle then we are raising the drawbridge.

Mounting frustration with the travails of modern life is driving us back into our homes, where we are seeking comfort in watching movies, eating and surfing the internet, a market research study has found.

The study on the mood of the nation by Australia SCAN found scepticism about business and government, a gloomy economic outlook and constant erosion of time and energy are leading to a sense of a loss of control.

Overall he noted a general malaise among the population, with more people less optimistic about the economic outlook and less confident of their personal finances than they were a year ago.

Homebodies raise the drawbridge to avoid an out-of-control world - National

How could Sydney get it so wrong?

Then there's the thriving, hustling metropolis, where every opportunity to show intelligence or courage or (God forbid) altruism is mowed under the determined asphalt of commercial tackiness. Take the huge Carlton & United Breweries site on Broadway. Take Homebush and Rhodes Peninsula, spewing dioxins into the upper atmosphere in order to roll out more third-rate housing. Take Botany Bay, or Cooks Cove, or Green Square, or the vast tackiness spreading up and down the poor old Parramatta River. Take East Darling Harbour, our chance for a real flagship of eco-design, right at our ceremonial front door, now set to become more bottom-line junk, like King Street Wharf, only more, bigger, glassier. Most of them were, or are, Government land; all offered the opportunity for real social and cultural play. What do we get? More of the same.

This is a waste and a belittlement. A waste of our energies, as a city, and a belittlement of our intelligence and enterprise. To a large extent it is driven by the narrowness of our politicians, who talk tough but timidly follow the do-nothing-stay-in-power model of government perfected by Bob Carr and John Howard and become more philistine by the moment.

Blaming pollies is too easy. They're elected, and we elect them. If we wanted to make city-shaping issues into electoral ones, we could. We only have to be sceptical when they talk about conflict between the environment and job creation, and wonder how many jobs we'll have when the air turns to soup and the water laps at our doorstep. We only have to put our votes where our mouths are. We only have to find courage, take the risk, want to - enough.

How could Sydney get it so wrong?

Home ownership slips out of reach

Housing is at its least affordable in almost three years, with spiralling land costs and excessive fees making home ownership more out of reach for Australians.

"Since the national housing cycle hit its peak it has been readily apparent that the triple whammy of spiralling land costs, excessive fees and charges and planning red tape was making a tangible recovery in housing affordability virtually impossible.

"Moreover, a distinct lack of progress in addressing these three factors means that in the higher interest rate climate of 2006, we find ourselves back in the same affordability hole."

The manifest failure of government to act at any level on housing affordability in Australia simply beggars the imagination. It's so appalling that one begins to suspect a 1984-style conspiracy on the part of Ministers — "imagine a boot stamping on a face — forever".

Home ownership slips out of reach

Sydney's pay-later poor

Sydney's pay-later poor The Sunday Telegraph

DEBT-stricken families with new homes, cars and plasma televisions in Sydney's sprawling housing estates are relying on charity handouts to buy food.
Welfare agencies report a worrying increase in the number of middle-income families with big mortgages seeking help to pay grocery, electricity and gas bills.

Dubbed the 'pay-later poor'' by St Vincent de Paul, they live in homes boasting cable television and the latest electrical goods and use credit cards to meet basic living costs.

Many of the families live in so-called McMansions.

Rising interest rates and petrol prices have hit them hard, with the latest figures showing soaring personal debt levels and bankruptcies.

How the housing bust went west - Opinion - smh.com.au

Looks like the spruikers' stories caught the slower Westies out. When interest rates went to an all-time low, shrewd investors in the eastern and northern suburbs probably saw a price boom coming, and bought early, possibly to sell at the top. Once the seminar gurus got up steam and convinced the Westies to negative gear, because 'it always goes up', it was too late -- the tulip boom was busting.

Does the NSW 'Labor' government care about any of this? No way, they're too busy bailing themselves out of their countless screw-ups and aiding and abetting their capitalist cronies, many of whom are in property development themselves...

How the housing bust went west

We of the never-never home loans

THE RESERVE Bank is alarmed at the rise of interest-only home loans, warning of negative equity for borrowers who fail to make inroads into the principal of their loans while house prices fall.

Sydneysiders who bought at the peak of the property boom and have faced the sharpest falls in property values are most at risk of negative equity, where the size of the debt exceeds the value of the home.

Despite not having to make principal repayments, borrowers with interest-only loans were found to be twice as likely to fall behind on their payments. "The [nationally] higher arrears rate is hardly surprising, given the general lowering of credit standards that has occurred since the mid-1990s," the Reserve Bank said.

Fierce competition among banks for market share has led to an increase in interest-only loans being offered to people who previously may not have been considered creditworthy. A third of sub-prime borrowers - those who do not meet standard income or credit history requirements - choose interest-only payments.

But by lowering upfront repayments, these loans encourage already at-risk borrowers to take on more debt, the Reserve says.

Its review also found evidence that mortgage arrears are on the rise. NSW suffered the largest increase in loan arrears over the past year, consistent with other signs of stress, including a doubling in repossessions.

We of the never-never home loans

Bought for $262,500 in 2003, sold for $95,000 last week

The boom is busting — a little. State and Federal govts do nothing to control such capitalist boom/busts based on irrational exuberance, of course, although, when you think about it, just about every single other aspect of property is controlled — what you can build, how high, how densely, to what standard, etc. Why do they let prices go free-floating to the detriment of the economy and individuals?

Macquarie Bank property research analyst Rod Cornish said defaults among mortgage brokers and low-documentation loans were higher than major banks.

However, he said Australian Prudential Regulation Authority figures showed the number of loans across Sydney in default with the major banks had begun to rise.

'You would expect the price impact on homes would be worse in the outer western suburbs where the rates rises and fuel rises would have a higher impact,' he said.

Elliott Shiner First National real-estate principal Angela Elliott said: 'Everything that is selling now is selling for $40,000 to $50,000 less than it was in 2003. Properties have dropped by a good 30 per cent in value.

'You can pick up properties in the Mount Druitt area for $180,000 to $200,000. There are real bargains to be had, but where are the buyers?'

Bought for $262,500 in 2003, sold for $95,000 last week

PM told he's wrong on house prices

PM told he's wrong on house prices

Housing booms and unaffordability are multi-factorial. The Federal Coalition is as much to blame as anybody for keeping negative gearing on investment properties and halving the rate of capital gains tax – these are just two of the inputs to housing price increases. Other factors include liberalised credit products from lenders, low interest rates, a shaky share market, and the 'psychology of booms' or irrational exuberance. However, no government in Australia has done anything particularly meaningful yet to alleviate the housing boom or make life easier for first home buyers, but appear to be cheerleaders who want to join the club in uncritically celebrating every price rise as an 'increase in household wealth'.

Mr Robertson said the needs of first-home buyers were being ignored because most voters were home owners and therefore had an interest in higher, not lower, property prices.

'Neither the Coalition nor the Labor Party in Canberra show any sign of going out of their way to make any significant difference – [First-home buyers] are not a big enough priority for Canberra to do much beyond blaming the states for not releasing enough land,' he said."

Priced Out Of House And Home

The Register-Guard, Eugene, Oregon, USA:

There is one clear solution to the affordable-housing crisis: a real estate crash. It's the one housing issue that attracts media attention - because it would hurt the Owns. But while an easing of prices could be devastating for lower-income Owns with risky mortgages, it probably wouldn't bring home ownership within reach for many Own-Nots. Prices have too far to fall; in 2000, two-thirds of the home sales in Fairfax were for $250,000 or less, but last year, fewer than one-twentieth were. And even a modest price slump could trigger a construction slowdown that would make shortages of affordable housing for moderate-income families even worse.
Eventually, politicians may rediscover housing - not as an urban poverty issue, but as a middle-class quality-of-life issue, like gas prices or health care. Homeownership is often described as the American dream, but these days many workers would settle for a decent rental that won't bankrupt their families.

Boom and bust on the home front - smh.com.au

The state government (ministers, advisers and sundry flacks), speculative investors, lenders, and voters should really have a good, hard think about this:

Boom and bust on the home front - National - smh.com.au

Of course, the PM is now suddenly worried about the problem of low housing affordability, whereas a few short years ago in a televised radio interview he shrugged, looked bemused, and said, "none of my constituents are complaining that their house values have gone up"... just another typical backflip from the PM...

Home owners find equity a spent force

Tried to warn them:

THE stagnant property market has taken a toll on a favourite Australian pastime: converting bricks and mortar into cash.

The boom in equity withdrawn from housing and used to boost superannuation, bolster share portfolios and buy cars, overseas holidays and plasma televisions has petered out, a report by the Reserve Bank says.

Robert Mellor, of BIS Shrapnel, said Sydney house prices might fall a further 5 per cent this financial year because of higher interest rates, pushing more households into negative equity. However, the strength of the labour market was helping to prevent a surge in forced sales, he said.

Home owners find equity a spent force

Consumer hopes dive as prices weaken pay rises

THE Coalition pinned 10 years of legitimacy on the fact that low and stable interest rates made for comfortable consumers. But mortgage pressure is rising everywhere and consumers have suffered the sharpest loss of confidence in 17 years.

So this week the Coalition dumped the political strategy of reassurance for a claim that it can manage adversity better than Labor.

The housing 'boom' chickens are coming home to roost...

Consumer hopes dive as prices weaken pay rises

The Daily Telegraph | Suburbs' rent chaos

The Daily Telegraph | Suburbs' rent chaos: "SYDNEY'S rental crisis has spread west as outer suburb vacancy rates spark unprecedented competition among homehunters.
In some areas of Sydney desperate renters are panic bidding and offering to sign 18-month leases in an attempt to secure a home.
Other exasperated homehunters are so frustrated they have given up and turned to living in share accommodation with strangers instead."

The Daily Telegraph | Land sale cover-up

Land sale cover-up: "THE State Government has been caught out trying to cover up its secret plans to sell off parts of the 5500ha Western Sydney parklands."

Do you think there was going to be any allowance for mandated affordable housing in this land sale to developers? Given that the NSW Labor government has no policy on this.

Aussies sinking deeper into money crisis

Does NSW Labor really care about the plight of workers in the state? Not really. Otherwise they would have done something about housing costs along time ago...

"Australians are sinking deeper into financial crisis, with petrol prices soaring and higher interest rates making it more difficult for consumers to pay off their debts.

And financial counselling services across Australia are finding it difficult to cope with the growing number of people needing their help.

Mike Young, a financial counsellor with Lifeline Western Sydney, said debt crisis was not unique to low income earners.

But the effect of this month's interest rate rise on Australians was yet to be seen, he added. Other factors were also hurting household budgets, Mr Young said. "We are seeing the start of the effect of the new industrial relations laws," he said. And recent changes to debt recovery laws were not helping, Mr Young said."

Aussies sinking deeper into money crisis

The global housing boom - In come the waves - The Economist

"NEVER before have real house prices risen so fast, for so long, in so many countries. Property markets have been frothing from America, Britain and Australia to France, Spain and China. Rising property prices helped to prop up the world economy after the stockmarket bubble burst in 2000. What if the housing boom now turns to bust?"

The global housing boom - In come the waves - The Economist

Real estate bubble and the housing spin

Here's an article for the idiot politicians to think about as they refuse to regulate or gag the 'sunny Jim' REI and PCA types:

Real estate bubble and the housing spin - 'I Want My Bubble Back!'

There's nothing funnier or more satisfying (for me, at least) than watching the National Association of Realtors (NAR) change its tune these days. The latest news release from this sunny-Jim industry group finally fesses up to its past fiction, but even when it admits the bubble's going to pop, it can't muster the courage to just come out and say it."

By Seth Jayson (TMF)

Realtors Using "Econ" to Push Overpriced Homes

Real estate agents seldom differ the world over...

patrick.net Blog - Realtors Using "Econ" to Push Overpriced Homes

No room at the inn - Online Opinion

Federal Labor Senator Kim Carr on 'the problem of homelessness' and reader comments, including some of my own:

No room at the inn

Reader comments

There appears to be an absence of policy ideas from Federal Labor on homelessness, and also a conspicuous lack of an affordable housing strategy.

Riotous Real Estate

ZNet |Economy | Riotous Real Estate

Last February the sirens howled in Hollywood as the LAPD rushed reinforcements to the 5600 block of La Mirada Avenue. While a police captain barked orders through a bullhorn, an angry crowd of 3000 people shouted back expletives. A passerby might have mistaken the confrontation for a major movie shoot, or perhaps the beginning of the next great L.A. riot.

In fact, as LAPD Captain Michael Downing later told the press: "You had some very desperate people who had a mob mentality. It was as if people were trying to get the last piece of bread."

The bread-riot allusion was apt, although the crowd was in fact clamoring for the last crumbs of affordable housing in a city where rents and mortgages have been soaring through the stratosphere. At stake were 56 unfinished apartments being built by a non-profit agency. The developers had expected a turnout of, at most, several hundred. When thousands of desperate applicants showed up instead, the scene quickly turned ugly and the police intervened.

This could happen in NSW under NSW Labor - not that they make any affordable housing projects available at present...

Neil Jenman News Articles

You can see why governments like to leave real estate transactions, the largest transaction many people will ever conduct, in the hands of the private sector, usually without scrutiny. Governments like to trust real estate agents and property developers to act as their policy agents in the area of housing.

News Article "GRANDMA RIPPED OFF"

Article "THE WESTPOINT DISASTER"

Australian Securities and Investments Commission chief, Jeff Lucy, said of the financial planners who steered their clients into Westpoint, “They should have known better.”

Yes, indeed, it was all so predictable. Now, it’s all so tragic.

ASIC useless after the fact, as usual.

And finally, a suggestion for Westpoint investors.

Do not feel stupid or embarrassed. [Even the New South Wales branch of the ALP reportedly invested $100,000.]

What a surprise, that the right-winger property ghouls in NSW Labor fell for a get-rich-quick property scam...

DEMOGRAPHIA: 2nd Annual Demographia International Housing Affordability Survey (2006)

DEMOGRAPHIA: 2nd Annual Demographia International Housing Affordability Survey (2006)

Many analysts and much of the business press have followed the unprecedented housing cost price escalation with seeming glee, while ignoring the reality that household incomes have not been inflating at a corresponding rate. This superficial approach is both naïve and irresponsible. Any number of products might be imagined that might be converted into objects of financial speculation, at the same time as rendering a nation less prosperous. For example, massive and unprecedented price escalation, from speculation in food products or medical markets might serve the short-term interest of investors, while imposing broad detrimental effects. There is a public interest in maintaining house prices within the economic means of most households.

Oddly, the most affordable markets have sometimes been characterized as 'poor performers'. There are many losers when home prices become decoupled from the underpinning income realities. Middle income and lower income households find it impossible to afford the higher prices and may be relegated to renting for many additional years, if not a lifetime. The equity that they would have built up instead goes to the pockets of landlords. Others fortunate enough to afford the higher prices must settle for more modest houses, which are likely of lower quality. Many of households will be able to afford their own houses only through financial assistance from their parents, while those with less affluent parents will remain in rental units. Already there is evidence that the average age of first homebuyers is rising.

By reducing the share of households that can afford to buy homes, high Median Multiples inevitably lead to greater income disparity. Thus, to think of rising house prices as a good thing while ignoring the incomes that support them is to miss the point completely. Australian Reserve Bank Governor Ian MacFarlane emphasized this point in parliamentary testimony with reference to the unaffordable housing prices in Sydney.12 The reality, of course, is that the more affordable markets are the better performers by virtue of the higher standard of living that they facilitate for more households. However, the reality is that declining housing affordability has reached crisis proportions in many markets.

Poor little rich city

Poor little rich city - National - smh.com.au

Sydneysiders' living standards have fallen over the past year, eaten away by higher petrol prices and falling home affordability.

The Sydney prosperity index, the only comprehensive measure of material well-being in Australia's biggest city, also exposes a huge and widening gap between those who own assets, such as property and shares, and those who don't.

The economic quality of life of these 'have-nots' has been sliding for the past two years and they have fallen twice as far from their prosperity peak as the asset-rich.

Sydney is still Australia's most expensive property market and it is still hard for new buyers to afford a home. In last year's December quarter, a worker on the average wage would have needed 492 weeks (9½ years) to earn enough to buy the typical Sydney house, compared with 398 weeks (a bit more than seven years years) in 2000. In March 1987, that worker would have needed 243 weeks (a little more than 4½ years) to earn enough money.

The capacity to pay the typical monthly mortgage in Sydney has deteriorated in the past two years to levels last seen in the early 1990s.

Interesting how governments allow fallout from the stockmarket crash of 1987 to adversely affect so many in the next generation when it comes to buying their own home.

Costello hails revival while economy struggles

Costello hails revival while economy struggles - National - smh.com.au

Australia has undergone an economic revival under his watch, Treasurer Peter Costello says, despite the latest figures showing the economy is struggling and homeowners are continuing to shun malls and shops.

And he said this was largely because of the way he and the federal government had overhauled the nation over the past decade.

But Mr Costello's revival is hitting problems, with the latest national accounts showing the economy grew by a weaker than expected 0.5 per cent in the December quarter.

The growth rate makes Australia one of the slowest growing developed nations in the globe, with annual growth now at 2.7 per cent.

There were downturns in consumer spending with the public, stung by the downturn in the property market and higher petrol prices, continuing to shun the nation's retail outlets.

Costello has done nothing for the economy in the last 10 years, he has basically sat back and watched the private sector operate by itself, taking the credit whenever poorly reported GDP 'growth' figures look cheery. Treasurers do very little to 'manage' any economy, their principal job is to collect taxes for the government and look concerned. It's a myth that they 'manage the economy', and if you listen to and read their speeches very closely, you will realise they never actually make that claim, but they like naive journalists to present that notion to the public for them.

Cheery 'GDP growth' figures were always a sign of empty internal domestic inflation in the housing market, they had nothing to do with increased productivity or real wealth creation for the country as a whole, just more borrowings from the banks. Now the boom has fizzled, the country has to stand on its industries for that elusive glow of 'economic growth'. It's very lucky newly emerging industrial giants like China have pushed commodity prices higher for Australia, or growth would be negative by now. So now the spruikers are advising the horde of slavering property investors to 'invest in Darwin and Perth.' The exploitation and dollar chasing never ends.

Hyperinflated prices for property have impoverished the next generation, who can now no longer afford to shop retail. And remember the Federal Government (Peter Costello) retains negative gearing on investment properties and halved the rate of capital gains tax, making his own contribution to the housing bubble, and doing nothing to prevent it. Also, the First Home Owners Grant (FHOG) also probably further inflated prices in an uncapped free market without government intervention or regulation.

The next thing that will happen while property prices remain so high is that there will be increasing upwards pressure on wages - industrial action from wage workers, and inflationary retail prices from small business.

Finally, the current young generation who were locked out of the housing market and could never afford to invest in the equity of their own home will become pensioners reliant on the Federal Government to pay their rent and otherwise subsidise their old age after they have retired, whereas the current generation of retirees who could afford to buy a house have much lower ongoing living costs. Oh, and there will be the 5% of rich investors who purchased all the housing out from under everyone else as 'investment properties'.

House prices recover, but it may yet be a blip

House prices recover, but it may yet be a blip - National - smh.com.au

Since prices have dropped marginally, a few young hopefuls and avaricious 'investors' are getting back into the market, pushing prices back up a little. However, since the housing vampire has drained every drop of blood from the economy, there are a lot more genuine would-be owner-occupiers still out in the cold.

(Thanks for doing nothing still, state government. Keep up the good work. Keep handing out taxpayers dollars to speculators, Federal Government. Ditto.)

What's a fair price for property?

What's a fair price for property? - Opinion - smh.com.au

There are thousands of owners of five-acre lots in the two growth areas. I talked to some in Leppington two weeks ago. Many are migrants who bought their land for relatively modest prices in the 1970s, and hope a big increase in value will fund their retirement. The political implications if this doesn't happen could be considerable.

How much would they lose? In 2004 property developer Peter Lowry told the Productivity Commission, in a public hearing on first home-ownership affordability, by his estimate land owners in the new growth areas stood to make $10 billion from the rezoning of their land. If they ended up losing up to $6 billion of this due to the levy pushing down the price of their land, would that be unfair? How much of a windfall do they deserve from a stroke of a rezoner's pen?

Interesting article. Also interesting is how people sitting on 5 acre blocks expect the sale to fund their retirement — still the same old 'easy money for property', 'why should I work for a living?' mindset that fuelled the property boom in the first place. And all endorsed by your government as the very best way to make housing affordable and provide for a socially just outcome for all...

Behind locked doors - the deadly epidemic of fear

Behind locked doors - the deadly epidemic of fear - National - smh.com.au:

'Most people keep to themselves here because of the crime. A lot are elderly and are frightened to go out. They don't even want to know if their neighbour has died, let alone get to know them,' he said.

The Redfern Police Commander, Superintendent Catherine Burn, said Mr Newman's death was 'sad and tragic' but the circumstances were inevitable when elderly people lived alone."

Oh, well, if it was inevitable, then there's nothing to be done, is there? Given the fear of crime that exists in Waterloo/Redfern, surely the best thing that the government could do is gradually bring in a mix of new arrivals from all backgrounds, rather than letting their friends the developers build a pile of yuppy box fortresses with steel bars to the street, creating a clear dichotomy of 2 extremes of class in the area: public housing and yuppies desperate to meet their inflated rents. Maybe everyone would relax a little more if a large number of 'affordable' residences were built and the more decent middle classes could start moving in and altering the character of the neighbourhood.

So, the state will begrudgingly give you supported accommodation if you're on a low income - but the price you will pay will be living in a state-created ghetto, living a life of fear from crime in the area, no matter how decent you are. That's the limit of creativity and imagination from the government, I'm afraid.

Bird flu threatens misery for millions

Bird flu threatens misery for millions - National - smh.com.au:

A separate Treasury study, also to be released today, says a bird flu outbreak that kills 40,000 Australians would cause a recession 'about half the size of the Great Depression'. However, earlier claims about 'the dire economic effects' of bird flu had been overstated.

But in the long run, those who survived would benefit from the assets of those who perished.

There you have it - a solution for hard-pressed governments who simply can't figure out a way to solve housing hyper-inflation and affordability problems - wait for a natural disaster to strike! That way they don't have to tamper with the market at all, just let nature take its course. Unless they want to get embroiled in WWIII instead, or something, that would also be a good way to solve problems of free market hyper inflation and supply and demand problems.

Note that governments agonise over the 'pig in the python' baby boomers dying off, who will then be leaving a pile of old decrepit houses behind - what will that do to housing prices, with a sudden relative over-supply on the market? Doubtless that will be the signal to governments to open the 3rd world floodgates to prop up prices to keep their rich landlord cronies happy. (Note that the Australian Property Council loves immigration, it keeps a steady supply of near-impoverished renters coming in for its landlords to feed off. Vacancy rates are at an all time low!)

If a bird flu epidemic occurs, then I suppose those who 'benefit from the assets of those who perished' can go back to being landlords and fleecing people in the market all over again, and the spruikers can have a whole new run, although market prices for housing should be lower according to normal economics theory. At least governments will be happy at last, and, after all, the citizens are just here to keep government happy, isn't that the way it's meant to work?

Thousands on the dole leads to one thing: recession

Thousands on the dole leads to one thing: recession - National - smh.com.au:

RECESSION haunts NSW as it struggles with the rise and fall in Sydney property prices.

Debt-laden households, confronted with property prices going down, have been cautious in their spending for some time. This is taking a toll on jobs.

NSW's jobs figures add to a litany of poor economic indicators. The state has had fewer building approvals in December than Victoria, Queensland and even Western Australia. Its small businesses are the nation's most pessimistic and are demanding lower taxes and less red tape. The state's share of the national economy is down from 36 per cent in 2000 to 34.3 per cent in 2004-05 - the lowest state ratio records began in 1989-90.

ANZ's chief economist, Saul Eslake, said the Premier, Morris Iemma, had a huge job ahead of him to clean up after Mr Carr, whose lack of interest in economic policy was "rather redolent of Whitlam".

Mr Eslake said the state economy would take five years to recover from Mr Carr's legacy, which included the ill-timed vendor tax, a misconceived desalination plant, infrastructure neglect and discouragement of population and economic growth.

The bigger the empty housing boom, the harder the recession. I doubt whether the NSW Labor government has a single practical economist amongst them. These idiots presided over 12 years of uncontrolled housing boom, and are now facing a jobs downturn from the fact that no-one has any discretionary money left to spend on the retail and wholesale sectors. It's all gone into empty inflation in passive bricks and mortar. Hope NSW Labor are pleased with themselves, given that the Labor right gave up representing the interests of 'labour' years ago.

Talk about an 'ill-timed vendor tax' - if they had put it in 10 years earlier, they would have had a chance at forestalling the empty housing boom, which is causing so much distress, and now causing a recession, mass unemployment, and mass migration away from the city of Sydney. Of course, such a tax is only going to be offsetting the generous Federal tax giveaways of reduced capital gains tax and negative gearing allowances on investment property that helped stimulate the bubble and offered generous terms to the average punter to speculate wildly in property at the taxpayers expense.

Sack them all and start again with a people's government. If they're not just incompetent, then they must be downright malicious. Either way, you don't want these clowns running the state or the country.

Officer buried property scam

Officer buried property scam - National - smh.com.au:

Graham Wade, a former property sales manager in the then Home Purchase Assistance Authority within the department, has told the ICAC that he had planned to sell surplus government properties at as low a price as possible to friends, and split the profits when his friends resold them at a higher price.

Instead of making State govt land available to do price covenant-controlled affordable housing, the NSW State govt (Labor) have corrupt officials selling it off in a scam instead... land that could be redeveloped into affordable housing... it's good to see how Labor looks after the battling working poor...

Call to double first-time buyer's grant

Call to double first-time buyer's grant - National - smh.com.au

The federal government is under pressure from its own ranks to more than double the first home owner's grant.

Queensland Liberal MP Steven Ciobo said the grant, introduced at the same time as the GST to boost home ownership, should be increased from $7,000 to $15,000.

Mr Ciobo, a member of a coalition group lobbying for tax reform, said the grant's eligibility criteria should also be tightened to ensure it does not go to wealthy people to buy multi million dollar homes.

While Mr Ciobo's concerns are admirable, and he has pinpointed the problem of housing affordability extremely well, providing ever higher government grants without caps on house prices in the market place is only going to fuel further inflation — real estate agents and developers are simply too oily to let an opportunity like that pass by without ratcheting up prices some more.

The real answer is in halting so-called 'market forces' by using price covenants, controlling the cost of land and construction, and finding other ways to cool down housing prices. Otherwise, not only will individuals continue suffering, but the entire economy is at risk of collapse from over-borrowing and over-indebtedness, largely drawn from overseas funds. Further, governments should distinguish between investors and owner-occupiers, and discourage spruiking and real estate investment drivel and hype in order to better house citizens affordably.

I would point out that PM John Howard in radio interviews has shown complete indifference to the problem, arguing that 'none of his constituents are complaining that their house values have gone up.'

Further, both Howard and Treasurer Peter Costello continue to allow 'negative gearing' tax deductions on investment properties and 'half-price' capital gains tax on sale of a property, which has lead to a continued speculative boom funded in part by the taxpayer. When state governments then levy land taxes on investment properties, they are lambasted by greedy real estate lobbyists and upset investors in the business of exploiting renters for all they are worth...

Huge rise in repossession

Huge rise in repossession - National - smh.com.au

THE number of properties repossessed by banks was higher last year than after the recession of the early 1990s, as a growing number of overstretched investors were burned by Sydney's house-price slump.

There were a record 4873 cases lodged in the NSW Supreme Court's Possessions List in 2005 - a 59 per cent rise on 2004, and more than double the number of cases in 2003.

This compares with 3287 cases in 1991 as the economy recovered from deep recession.

Young investors defaulting on home loans was one factor behind a surge in legal action against borrowers last year, a court spokesman said.

But property always goes up 10% every year without fail! That's what the spruikers and real estate agents told me! I paid $5 000 for a 3-day course!

Thanks spruikers, thanks real estate agents, thanks state and federal governments who do nothing about capitalist waves or even offer inappropriate tax breaks to speculators, thanks ASIC, a paper tiger who turns a blind eye to get-rich-quick spruikers, thanks banks for offering interest-only loans to desperate young owner-occupiers or 'investors' and huge amounts of credit. You're all to blame. And further you think it's funny, because you've walked away with these people's money at virtually no risk to yourselves. Nice one.

Land tax prices to go through the roof

Land tax prices to go through the roof - National - smh.com.au

PROPERTY owners will be hit with higher land tax bills thanks to rises in official valuations on top of a new higher tax rate.

I don't have a huge problem with this, unless it feeds into higher rents - landlords will pass on land tax increases to tenants, although with a $330 000 threshold, the landlord would need to own multiple properties or expensive properties for it to bite. However, in an essentially free property market, there is nothing stopping landlords from passing it on as a 'fair increase' in rent.

What really annoys me is that the State Government has the resources to value every single property in the state and levy such taxes, but does nothing about controlling housing prices to benefit the community — as per the OECD report published recently (immediately below) demonstrating houses are overvalued by around 50% across Australia.