BLOG: housing

Telling the RBA like it is

Reprinted from On Line Opinion 6 Sept 2012 The apathy of economists about the costs and burdens imposed upon modest citizens is staggering, as though this is their natural lot and there is nothing to be done. Housing is a perfect example. We see young adults rejecting...

House prices stagnate

The ABS Eight Capital Cities House Price Indexes 6416.0 released today shows the property market is totally stagnant with prices unmoved, says Prosper Australia. “Property spruikers calling ‘Bottom!’ based on this data - and they will be – are misleading homebuyers....

Weak Construction gets Weaker

Dwelling construction continues to fall, according to the AIG-HIA Performance of Construction Index for May. Commercial construction and house building activity weakened to 34.7, where anything below 50.0 represents contraction. In parallel, the ABS Building Approvals...

Land Rent = Job Creation

A nifty clip from our South African colleagues Karen Cooper and Peter Meakin. Of note is their useful method comparing 300Rd p/m in land rent to the 60,000Rd we currently pay to banksters.

Muck in Marrickville

Today's Sydney Morning Herald has a breathless article about a flipper couple who bought, renovated and have for sale a Marrickville terrace. The underlying message: there’s profit in the renovation game. My back-of-envelope calculations based on the article’s figures...

Psst! Stamp duty can be avoided

As the Fairfax papers reported on April 14, the NSW government has rejected yet another recommendation to replace conveyancing stamp duty by a broad-based land tax. That is the effect of the "stamp duty replacement tax" recommended on page 13-4 of the Lambert...

Nine Quarters of Weak Land Sales

Australia has experienced nine quarters of falling land sales volumes with the last five quarters flatlining forty per cent below long term averages. The big falls in prices we have been predicting are now a certainty.

House Price Bust: Why Talk of a Bubble Won’t Wash

Philip Soos notes eight of the nine substantial property price increases over the last 131 years have resulted in a decline. He can’t see why the largest increase on record would not precede another drop now. Soos does not buy the argument that Australia is suffering from a “chronic housing shortage”, saying property prices have continually experienced boom-bust cycles regardless of population growth.

What a party; what a hangover!

Asset prices falls come straight off our personal equity, our savings, while liabilities – mainly the home mortgage – are payable in full with interest from after-tax incomes. Returning to – overshooting – the long-term land price average is going to be quite an experience for anyone with big borrowings.