There’s a PDF of a speech yesterday by Ric Battellino up at http://www.rba.gov.au/Speeches/2009/sp-dg-251109.pdf. He comments that lower health costs mean we can spend more of our income on housing than the Yanks. Also, that those under 35 years of age have experienced a noticeable decline in home ownership over the past 10-15 years and that this “may” (!) be “financially driven”. How ridiculous. What was the idea of this speech, is he trying to prop up the bubble?

There are some diagrams but nothing scary like the ones on your site, in fact his Graph 8, Housing Loan Repayments as a percentage of household income makes it look like things were much worse in 1989 than now. I’d be interested to see your response to this speech on this blog.

“Though a house, therefore, may yield a revenue to its proprietor, and thereby serve in the function of a capital to him, it cannot yield any to the public, nor serve in the function of a capital to it, and the revenue of the whole body of the people can never be in the smallest degree increased by it.” — Adam Smith

However, as always, no comments allowed in The Oz? Scared that people may agree with Keen and not believe the myth, the spruiking and bull***t surrounding Oz property prices?

I still back Steven Keen, why?

There are many knowns which are unknown by the media, analysts etc. or simply ignored, e.g. bogus population growth figures.

Long post see http://aiecquest.blogspot.com/2009/11/australian-property-prices-robertson-vs.html

However still, increased debt leads to increased prices and increased per capita debt is unsustainable.

But even though this is unsustainable, capitalist policy makers will do everything they can to protect capitalists including first home buyers schemes, astronomical economic stimulus, artificial population growth, minimum wage cuts, social wage cuts, introducing cheap-labour imports, and so on.

By focussing on debt (a symptom) Steve, like Aarons, has misunderstood the real contradiction within capitalists political economy. he should drag Aarons along with him.

He should realise that as he tramps up the side of Kosciusko, Karl Marx from his grave is laughing his head off.

Chris Warren

Just a quick comment. I have to pack my house since I am being evicted. I wish I could follow this blog regularly.

I am always traveling around the local area (population of maybe 10,000 people) about once a week and over the last few months, I have seen an increase in properties going onto the market. Since the FHOG has finished, strangely this increase has jumped substantially. Some of the newly listed property that I seen (remembering I have been viewing each week) have already been sold.

I have not seen such condition since around 2003 or better put, I have never seen so many houses going up for sale in such a short period. I benefit by assets since people throw out valuable things when they move or are having moving sales. Seeing what Steve said above, when to many people enter the market at once, the general value of housing goes down. I presume that the lower priced housing, best housing, or best neighborhoods for housing is being sold quickly.

From my small view, half of the housing is sold within a week where at the other extreme, some housing have been listed for months on end. I am wondering if there is online statistics which shows such market conditions?

The reason and logic are not fathomable, nor probably is the amount of debt to equity nor income to expenses a ratio that a lot of people would deny was workable in the first place.
Whatever it is the Banks in new home lending are putting the new borrower at risk by allowing others leveraging on the results of the latest realised sale price.
I would think small business distrees will be in full flight by March next and full cognition(closer to every day people with every day debt)by a majority of citizens that the party is over and the REAL World is just beginning (for them anyway)

Professional media people must move with the mood and use the topline numbers
(especially from authority – RBA, IMF – hence the issue with Steve’s status to undermine his arguments) to endorse the view that it only gets better.

Fairfax journalists resent the allegation of writing for a paymaster but the organization’s revenues are in part made from the property sector. Content creates advertising and users/readers.

Like politicians, they understood how they must butter the loaf.

And watching CNBC today, Roger Montgomery was fairly quiet in his views – seemed perhaps a little embarassed to have been “wrong” on housing, thus far – while it’s clear he still thinks it’s a bubble, he’s not prepared to say much more on the issue.

I think it has a great deal to do with reputational risk at play.

As I said earlier, a useful derivation of Keynes would be the market can remain irration for longer than an analyst or commentator can maintain their repuation and/or job.

Moreover, I’ve heard Plibersek say a number of times words to the effect that “Australia’s prosperity depends on house prices remaining in a bubble” – of course she said “not falling”, but that just plays a bit better when they’re spending our $$$s to ensure that kids continue to pay the world’s highest multiple of their salary for a home. (And, afterall, Garnaut is highly respected by Labor – they wouldn’t have got him to take the running on climate change if not – and now he’s come out unequically calling it a massive bubble.)

So I also think that Government has put a lot of political capital into it, and they will be exerting as much pressure as they can possibly bring to bare behind the scenes to ensure that media outlets and channels carry the line that they want.