Letter to the Editor – The Age
April 2nd, Karl Williams, Tecoma
First home buyers sink
WHATEVER you think of the ”buyer’s strike” aimed against buying homes at the top of the property cycle (Buyers strike goes viral), the time must surely have come to question our passive endorsement of ever-escalating property prices.
The so-called housing boom only benefits those with two or more properties, and sinks would-be first home owners into ever greater despair. Federal governments have consistently skewed tax policies in favour of developers and investors, whose lobbying power and political donations far exceed those who think a home should be primarily a place for families to live (how odd!).
That a little outfit such as Prosper Australia can use social media to rally the economically downtrodden sends a powerful message.
April 2nd, 2011 at 4:55 pm
First Home Buyer’s Drain may be a more appropriate description.
or even “First Home Debtor’s Drain”?
April 2nd, 2011 at 11:17 pm
Thank you Prosper for starting this campaign. Excellent letter.
It is dangerous however to underestimate the depths spruikers will sink to in order to discredit this campaign and breathe new life into the property monster. The likes of Christopher Joye are conspicuously absent from the debate – I suspect secret lobbying for another stimulus package. When the property marketwas on the brink in 2008 Rudd’s stimulus only pushed prices up a further 20-30percent (by allowing FHB’s to leverage a further 50-100k gifting vendors this additional borrowing, which was used to leverage they’re next purchase at least another 200-400k, and so it goes). All stimulus succeeds in doing is kicking the ever increasing bust can further up the road.
The average Australian’s addiction to ever increasing equity in their home can also not be underestimated. The bubbliest facts are denied with religious fervour. Unfortunately the property industry is far better at selling lies to average Australians. What is required to keep the momentum going is a coordinated communications campaign aimed at educating the majority of homeowners that increasing home proces do not make them wealthy, that the opposite is in fact true. That if you sell your home you just have to pay more for the next one or. The increasing ‘worth’ of your home is worthless to you, worse than that it’s to your detriment as inceased prices=increased debt+reduced spending on everything else. It’s obvious to some that we have become a nation of debts slaves who have abandoned productive enterprise for speculation and that this leaves the economy completely exposed when our record high terms of trade finally reverse. But try explaining that to the homeowner who tells you they ‘made 100k on the house last year’. I fear that the bubble will lumber on until these skewed attitudes to housing as a source of wealth/investment are challenged. A clever communications strategy is required together with government lobbying re: policy reform (no NG on existing stock/no further stimulus ie. FHOG/return to indexed CGT rather than 40 or 50% reduction nonsense/replace stamp duty with land tax). In particular the message that FHOG only leads to higher prices must be communicated to the MSM urgently to prevent a fresh round of cheap dirty stimulus. Otherwise the campaign will just preach to the converted until the RE industry delivers a killer blow.
Any marketing/PR professionals listening and willing to support the cause?
April 3rd, 2011 at 2:00 am
Such a cause and only two comments – ahh the apathy of the masses.
April 3rd, 2011 at 9:46 pm
Joye Boy seems to be most keen on government backed AAA RMBS. Following the Canada model. But if we all stay on strike that fiscal strategy will have little effect.
April 4th, 2011 at 9:47 am
Oh I see, of course the banks and property industry are currently shoring up their own positions to limit their losses.
The covered bond limit is 8% of ASSETS, not a % of deposits – what effect will underwater mortgages have on this strategy? http://macrobusiness.com.au/2011/03/covered-bonds-exposure-draft-released
Beware the government investing our super finds in covered bonds to socialize the banks impending mortgage defaults into super fund losses http://www.theaustralian.com.au/business/industry-sectors/super-funds-back-covered-bonds-move/story-e6frg96f-1225969812156
April 4th, 2011 at 4:33 pm
How much do Kochie & Mel from Sunrise have invested in property? They advise 750,000 Australians daily.
April 4th, 2011 at 4:43 pm
There’s a Facebook campaign here:
http://www.facebook.com/EndNegativeGearingTaxSubsidy
I think a Facebook campaign will be far more effective than just voting on GetUp!
April 5th, 2011 at 8:41 am
This issue has to be seen not just as a economic issue, but a political one as well. The politicians will never respond ot the overwhelming evidence, unless it affects there political power.
These days politicians care less and less about what is best for this country, but more about holding political power.