Saturday, February 25, 2006

House prices recover, but it may yet be a blip

House prices recover, but it may yet be a blip - National -

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.)

Friday, February 24, 2006

What's a fair price for property?

What's a fair price for property? - Opinion -

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...

Wednesday, February 22, 2006

Behind locked doors - the deadly epidemic of fear

Behind locked doors - the deadly epidemic of fear - National -

'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.

Thursday, February 16, 2006

Bird flu threatens misery for millions

Bird flu threatens misery for millions - National -

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?

Friday, February 10, 2006

Thousands on the dole leads to one thing: recession

Thousands on the dole leads to one thing: recession - National -

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.

Thursday, February 09, 2006

Officer buried property scam

Officer buried property scam - National -

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...

Monday, February 06, 2006

Call to double first-time buyer's grant

Call to double first-time buyer's grant - National -

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...

Thursday, February 02, 2006

Huge rise in repossession

Huge rise in repossession - National -

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.