How to spot a housing bubble, by Glenda Kwek of the Sydney Morning Herald
Although this article includes a nice interactive graph and puts the case for a bubble, it doesn’t quite get to grips with the fact that from 1996 Australia has experienced an enormous land price bubble, as shown below.
It’s the escalation in land prices wot’s doing us in, folks – and it may be curbed by greater public capture of the unearned increment in land prices currently accruing to private interests who have homes, not to the poor, or renters, or those who’d like to be able to buy a home.
‘Taint simply a matter of zoning more land for residential subdivision. That has only marginal influence on land prices during a gargantuan bubble such as this. Whilst many economists and commentators may believe otherwise, land price has very little to do with supply and demand. It’s simply the private capitalisation of the uncollected rent.