Leith van Onselen on Australia’s Macro Housing conditions

Last week’s 121st Annual Henry George Commemorative dinner was a success with 70 in attendance. The audio from Leith van Onselen’s presentation was recorded and edited into his arresting powerpoint. Press play and enjoy the analysis.

Macro housing conditions – the long-term outlook for the Australian housing market from Karl

The Q & A following the talk can be heard here.

More of Leith’s work can be seen on Macrobusiness.com.au

View photos from the event.

See you next year.

8 Comments

  1. Bobby Fischer14-09-2012

    Best summary of the risk factors facing housing going forward that I have seen.

    Well done Leith. Your work has inspired others to blog about the outrageous and unjust taxation systems and largesse we have operating in this country, including yours truly.

    Cheers

    Bob

  2. Andrew15-09-2012

    Jason – that’s disgraceful.

    Who do you work for – REIx, or Rismark?

    If you are going to post a link attacking Leith’s work, then at least have the honesty to declare the nature of the link.

    Moderator – review of the previous post would be appreciated.

    Cheers

    Andrew

  3. Karl Fitzgerald
    Karl Fitzgerald15-09-2012

    thxs Andrew. These guys have enough disinformation out there as it is.

  4. Alex Chapman16-09-2012

    Leith
    This is a first class presentation with a clear cogent argument. The graphs are wonderful. But there must be many who will look at them and have their very first “uh oh” moment.

    Unfortunately this message is too late to save many of the small investors who succumbed to the negatively geared investment spruik and who are now about the find out that property -doesn’t- double in price every seven years.

    It’s a story that the mainstream media have ignored for the last 5 years and only now are getting to grips with.

    So you get to say “I told you so”. I suspect your suggested remedies will be overtaken by events – a new and predictable aversion to property investment by small investors that may take a generation to work through and collapse in bank lending for housing due to the banks’ becoming risk averse and tightening credit.

    Great work thank you.

  5. Karl Fitzgerald
    Karl Fitzgerald17-09-2012

    Thxs Alex, it certainly will be interesting to see how those 800,000 negative gearers go this spring real estate frenzy as they contemplate life throwing hundreds of dollars down the drain for the foreseable future. How many of them will sell? And to be reminded that 95% of investors buy properties in established locations, puts a mockery to the mis-information that investors add to supply.

  6. Ed Dodson13-10-2012

    It is interesting to observe how the Australian residential property market cycle is trailing that of the U.S. by these several years. This despite the fact that a major source of the credit obtained to fuel property (i.e., land) price escalation has come from financial institutions with a global reach. One would have thought the lessons of the U.S. crash would have stimulated tightened credit standards elsewhere going back to, say, 2008.

    As someone who worked in the industry and observed first-hand the climb in land prices here in the U.S., what was most remarkable was the failure of industry economists to identify the stresses building. Here in the U.S. mortgage lenders were required to deliver data on property appraisals to the main secondary market investors (Fannie Mae, Freddie Mac and FHA) but no one was tracking the changes in land-to-total value ratios being reported by appraisers. Had this been done it would have been readily apparent that an increasing portion of mortgage financing was going into land acquisition rather than housing acquisition.

    Now, over here, government policy is to prop up the land markets in order to protect banks from loan losses and homeowners from additional foreclosures. No one seems too concerned about reigniting the property market cycle frenzy. And, of course, speculators are acquiring properties at rock bottom prices in some markets in anticipation of flipping them for a handsome profit in the near future.

  7. Karl Fitzgerald
    Karl Fitzgerald13-10-2012

    Well said Ed.
    The liquidity rising land prices give banks must surely be more closely monitored, both by ourselves and the Treasury. The fact that Goldman Sachs had a blacklist for any land valuer who provided realistic rather than bubble like prices was one of the big stories of 2011 for me.

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