What we may expect over the next three years?

In the final three-year ‘good times’ of the 18-year real estate cycle, we may expect banks to find novel ways to provide financial excess to house-hungry young Australians and to older Australians needing to refinance their mortgages.

Land prices will thereby be pumped further moonward. The impossible cost of housing will continue not be ascribed to inadequate public taxing of land values (and the ensuing rampant property speculation) as it should, but to an inadequate supply of homes. So, nothing changes in that respect. 🙁

A media beholden to real estate and banking interests will paint these three years as ‘good times’ as the final seeds are sown for the 2027 depression.

Then what …?

When the real estate (read land price) bubble bursts and markets tank drastically, instead of bailing the banks out for risk management failure (and putting people out on the streets), the federal government should take equity in the banks, taking care to keep people in their homes.*

Renters will also experience the destructive financial outfall from the crash, of course. So, what to do?

To assist both parties through the depression and continue into eventual recovery, Australia will need to provide a generous universal income.* This will not only assist both renters and mortgage-holders, but it won’t put them at odds with their fellow Australians. Gina Rinehart won’t have reason to complain–other than it being inflationary–which a universal income most certainly will not be.

The depression will provide a great opportunity for the federal government of the day to untax wages and purchases, and tax land values, as it did when Australia had the lowest cost of living in the world, with land taxes at all three levels of government and no income tax. Combined with the universal income, the approach would end the political bifurcation and generate unheard of prosperity in Australia.

Something to think about?

Maybe not for those politicians and economists wedded to repetitive boom-bust and status quo?