Sunday, December 12, 2010

Treasury warning on home price 'bubble'

Can anyone work out WTF the ALP were thinking making Wayne Swan Treasurer?

"However, it is the considered position of the Treasurer and the Treasury that our housing market reflects the fundamentals of supply and demand and not a bubble - specifically that Australia is simply not building enough new houses."

Wrong on both counts as far as I can see. Assuming for a minute the confected lies were actually true, why then isn't Australia 'building enough houses'? (And where are all the people without houses living?) Surely that would represent some sort of national crisis the govt should be addressing urgently? So why aren't they?

I note Treasury use a report from vested interest Westpac as their bible also – who it appears may be almost on the skids based on their urgent borrowing of US Fed bailout money in a recent revelation.

I think Labor are deliberately keeping their heads in the sand so that if and when housing collapses they can pretend they had no idea. In the meantime, it's just unaffordable. They're forgetting the 'Labor values' of social justice and equality also in all this.

And we're actually paying people high salaries to be in a 'Household Demand Unit' in Treasury that is in equal measure useless and mendacious.

A SENIOR Treasury official has sounded the alarm over Australia's property market.

He has warned that the prospect of a sudden and dramatic drop in prices is "the elephant in the room" and should not be ignored by the federal government.

While the government and Reserve Bank insist Australia does not have a housing bubble - as some economists and the International Monetary Fund suggest - it remains such a worrying concept that Treasury has privately sought reassurance from its analysts that prices are not artificially high and that Australia does not face the kind of house price collapse that has hit Britain and the US.

Friday, September 24, 2010

More ALP corruption and betrayal of their constituency

Ever wonder why negative gearing benefits are unassailable to the ALP? Or why their response to a housing bubble is to increase the First Home Owners Grant to a boost? Why none of their pronouncements on housing ever make sense? Why Tanya Plibersek as Federal Housing Minister was wont to say, in effect, 'the poor will always be amongst you, so you may as well make them your tenants!'.

Plibersek and the kitchen cabinet were moved to boost the FHOG solely on the request of the head of the REIA when real estate sales slowed down marginally from record highs, driving the Federal budget further into deficit in the process.

Constantly decreasing home ownership stats since 1986 (Hawke and Keating years), especially in lower income households, clearly indicate the ALP have become class traitors. Instead of using government's birds-eye view of the economy to tailor policy to a better outcome than the market can deliver, they instead lie about 'housing shortages' and raid the Treasury coffers to prop up speculative loss-making investors and real estate interests.

Real estate and the ALP

In considering the lack of action by the Victorian Labor government on real estate-related matters (except for allowing developers to now rip 20% off mug buyers), you need to look no further than the rice-paper thin closeness of the REIV and the ALP -- represented by no less than Robert LaRocca, an ALP apparatchik, and present chief lobbyist for the REIV. As well being a former Labor mayor, LaRocca was an adviser to a consumer affairs minister (Marsha Thomson) -- and had direct influence over that agency. The very agency responsible for overseeing the real estate industry -- Consumer Affairs Victoria.

An agency deeply compromised by its close relationship with the ALP, its director proudly spruiking her close relationship with various ALP MPs and a couple of ex-ministerial staffers now working within the agency. It's more a branch of King Street than Treasury Place.

Home ownership fall will pressure welfare

People over 65 in Sydney now enjoy an 82 per cent home ownership rate, but
the proportion of lower-middle income households in Sydney without their own home rose from 26 per cent to 40 per cent in the 45-to-64 age group between 1986 and 2006.

''The substantial loss of home ownership by this age group was concentrated where it is likely to have the worst welfare outcomes as the group ages,'' an Australian Housing and Urban Research Institute study reported.

''They can expect a very long period of private rental under reduced circumstances.''

In 1986, about 60 per cent of middle-income households headed by people aged 25 to 44 owned their own home. By 2006 about 45 per cent were home owners.

There were now 217,000 fewer Sydney home-owning households in the 25-to-64 age group than if the tenure incidence levels of 1986 had been preserved.

Sydney's overall home ownership rate sat at 67.2 per cent in 2006, down on the 70.3 per cent level in 1986.

The report concluded the benefit of higher household incomes between 1998-2007 went into pushing up house prices and debt rather than improving home ownership equity or increasing the stock of housing.

''The very high housing prices that are currently extant are a major concern. It is our contention that this situation has been caused by government action - a deregulation of finance in the 1980s with no corresponding deregulation of planning.

''High house prices act as a drag upon growth and competitiveness, have exaggerated inequities in wealth and intergenerational inequity, and they will eventually increase the welfare burden.''