Hello,

I’m originally from Europe and moved to Australia in 1998. Since then I have noticed the constant obsession with property in terms of the media, news on TV and constant bombardment of building programs. All of these programs are mostly about speculating on property and seeing how much money can be made.

I’m a bit baffled by this obsession to “get rich and go for dreams” through property as all I read and I hear about now is “mortgage stress and rental traps” at the same time mixed in with the word “dreams”???

It is conflicting information and it appears many people are brainwashed.

As a first world country it is a disgrace that we cannot even get the basics of affordable shelter, food and clothing right. This is the foundation of any decent society. Every person should have an equal right to have affordable housing. Also this concept of “renting trap” is foreign to me as renting allows for freedom and flexibility and costs less than buying, however getting on the property ladder is the only way it appears you are going to make progress or are making it in Australia. How bizarre?

The choice to rent or buy is an equal proposition and people in Europe for centuries have the choice to rent their whole lives and many have a high quality of life. Most people who buy houses are actually poorer ie. UK,Spain, Greece – as compared to Germany or Switzerland where quality of life is a priority not quantity of life. These people are not described to be in traps. The question is at what cost and is it really progress when one is a few paychecks away from losing a job and when under massive mortgage stress. How can this ever be described as a dream? Whose dream is it really? A few guys at the bank or real estate who are profiting from ordinary people’s hard labor with million $$$ paychecks?

It does not make sense that people need to spend the greatest share of their income on having a roof over their head?? You cannot eat or take property to your grave, so why get so obsessed and worked up by getting on property ladders??? What purpose will this serve? Also what is this government doing to help the people instead of having policies that favour banks and real estate?

In Europe you will never hear such superficial nonsense such as housing dreams and this kind of propaganda to brainwash people. This concept has been created by those that profit from it most (ie. Government, banks, real estate). The only way this country will learn is when there is a significant downturn in property to bring everything back to earth for the benefit of the masses that are suffering. Speculation only creates a ponzi scheme through greater and greater debt with a few winners and not the majority of people. This will be the best solution for the people and expose government, bank and real estate irresponsibility over many years.

– name withheld

Well done, publishing Prosper Australia’s submission to the Senate on Housing affordability, MacroBusiness!

Quotes about land value capture from various economists

The Guardian has a story on European housing which matches Prosper Australia’s findings on speculative vacancies at home. Does this not demonstrate the urgent need to downtax labour and capital, and to uptax land values around the world if economies are to be resurrected and people housed?

‘Mike Norman Economics‘ carries the Rumplestatskin/Mason Gaffney case that all taxes ultimately come out of economic rent.  [So, why not put them there in the first instance, thereby cutting out the vast amount of price hikes, bureaucracy, and other deadweight generated by the taxation of labour and capital?]

Who’s taxing who, and who pays the rent?, Ross Gittens’ definition of rent-seeking

ASIC “reactive, not proactive”, Michael West  (How true! They’re meant to be outing the crooks before they go under.)

Everest-like boom in city apartments

Canadian rebuff to Chinese to inflate Australian real estate prices even further? (Or, why young Australians can no longer afford a home.)

Pearls before swine.  – Bryan Kavanagh

All taxes come out of rents.  – Cameron Murray

We ain’t got nothing but a carload of tax, and the doggone load is is just a breakin’ our backs.  (Breadline Blues)

Bubbletopia: Australia’s Land of the Never Never

By Paul Egan

Has a cruel delusion befallen this grand antipodean paradise? Girt by sea, but apparently without boundless plains to share. Eye-watering housing prices require debt contracts written in blood or the sacrifice of one’s first born. Perhaps it is my wicked imagining, for the usurers chime in unison that we are in a bubble-less sanctuary, with minor debt overhangs (hang overs?), frothy sub-pockets and minor bouts of exuberance that is treatable with minor antibiotics. For instance, CBA’s head usurer, Ian Narev, boldly proclaimed in recent times: “…we don’t think we have a housing bubble.”[1] Ian is not alone in his assessment: ANZ CEO Mike Smith: “We’re a long way from a bubble. There has been an adjustment back, in terms of the market.”[2] Westpac CEO Ms Kelly: “… said she believed that Australia was ‘nowhere near’ a housing bubble.”[3] NAB CEO Cameron Clyne: “We don’t see, certainly in the housing market, we don’t see a bubble emerging.”[4]

The Big Four must be doing ‘God’s Work.’ Clearly, a heavenly state of profit growth and ROE is divine providence, unrelated to a credit flood in the residential market. Being nowhere near, a long way from, adjusting back, and far from the emergence of bubble, there is only one possible explanation remaining: “We’re different here.” How do we know? Why, FIRE sector mouthpieces guarantee “It’s a structural upwards permanent plateau reflecting a chronic housing shortage and idiotic government policy, Chinese investors, Siberian investors, the mining boom, the dollar, RBA jaw-boning, RBA buzz-cuts, interest rate levering, consumer pop psychology, and Chinese princelings with suitcases full of freshly laundered cash,” allowing every residential property investor to win a prize. Please forgive those deluded classical and post-Keynesian economists for thinking this is simply a Ponzi-financed credit bubble, driven by rabid investors seeking a quick buck in financialized dwellings, spurred on by mere 100s of billions of tax breaks over the decades and the obscene privatization of geo-rent.