News item on Inter­est Only Mort­gages

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Chan­nel 7’s Today Tonight is doing an item on “Inter­est Only Mortgages”–like the prod­uct that ING has recently promoted–and the whole hous­ing bub­ble issue.

They are look­ing for any­one who has been “burnt” by either an inter­est-only loan, or a loan that was pred­i­cated on the expec­ta­tion that house prices would always rise–as is ING’s new product–who is will­ing to be inter­viewed about the expe­ri­ence on cam­era.

The item is being put together by James Thomas, who did the excellent–and yes, I do mean excel­lent!–“Chang­ing Times” on debt defla­tion in Feb­ru­ary of last year (unfor­tu­nately the clip is no longer avail­able online). I can vouch for James’s pro­fes­sion­al­ism and tact: the item will be well con­structed, and inter­vie­wees will be treated well.

So if you fit the bill and you are will­ing to be inter­viewed on cam­era about the expe­ri­ence, please con­tact James Thomas.

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  • bur­rah

    Dar­win houses out­strip those in New York
    THE aver­age Dar­win house is more expen­sive than its equiv­a­lents in Lon­don and New York, a com­par­i­son of real estate in cities around the world has found.

    Com­bined fig­ures from Residex and Aus­tralian Prop­erty Mon­i­tors show the median cost of a Dar­win house is $549,035 — almost $90,000 ahead of Lon­don, where the median price for a two- to three-bed­room house is $462,000.

    A two-bed­room, free-stand­ing house in the New York City met­ro­pol­i­tan area (not includ­ing Man­hat­tan) is about $80,000 less.

    Residex head of research John Lin­de­man said: “It’s quite incred­i­ble that houses are cheaper in those cities than in Syd­ney.

    But it’s caused by the demand for Syd­ney houses, which keeps out­pac­ing the sup­ply — and that’s not going to change any time soon.”

    In Los Ange­les it costs almost $250,000 less than in Syd­ney to buy a house. The peak US indus­try body, the National Asso­ci­a­tion of Real­tors, puts the median house cost at $401,000.

    Las Vegas is even more afford­able, with the price of a median house at just $166,000.

    Darwin’s real-estate mar­ket only failed to out­strip the major Cana­dian city of Van­cou­ver, where the median house price is $612,000.

    Mr Lin­de­man said house prices were dri­ven by pop­u­la­tion growth, as Aus­tralia was the fastest-grow­ing West­ern nation.

    In Japan, the pop­u­la­tion is actu­ally falling and age­ing, which means there’s less demand for houses,” he said.

    That dri­ves prices down and reduces demand in cap­i­tal cities, because peo­ple want to move away,” Mr Lin­de­man said. “We have the reverse. Younger peo­ple are flock­ing into our cap­i­tal cities.

    Pop­u­la­tion in the UK is also barely in growth — at 0.3 per cent it is vir­tu­ally at a stand­still so it equates to a sim­i­lar sit­u­a­tion.”

  • ak

    bur­rah,

    I obvi­ously agree with you that seri­ous money can only be made by “find­ing a niche which can be exploited”. Per­son­ally I have noth­ing against peo­ple who have done that even if I may be one of many who do not want to “be rich or die try­ing” at the price of not achiev­ing other per­sonal goals.

    What I have a prob­lem with is the sys­tem which encour­ages that. I believe that prof Hud­son is right. Some­thing is seri­ously wrong there — not nec­es­sary that the mar­kets are not effi­cient enough. If some­body is an entre­pre­neur (indus­trial cap­i­tal­ist) or highly skilled spe­cial­ist or just works very hard and is pru­dent — he/she should have a chance to gain real wealth. But instead of that the finan­cial wealth became the pre­dom­i­nant tool in mul­ti­ply­ing itself and acquir­ing the real wealth. I have met so many peo­ple who have a lot of knowl­edge (are physi­cist, math­e­mati­cians or even “rocket sci­en­tists”) but there is no demand for they skills — they just write moronic perl scripts or C++ code not serv­ing any real pur­pose. My class­mate who has a degree in biol­ogy works in a meat fac­tory check­ing that food is not rot­ten. The intel­li­gence of these peo­ple should be used to solve real prob­lems like get­ting enough food for every­one when cheap oil runs out, acquir­ing sources of renew­able energy, trim­ming down our energy con­sump­tion, reor­gan­is­ing our cities so that we do not have to waste hours every day com­mut­ing to work.

    Prof Hud­son wrote:

    Finance was viewed as ancil­lary to indus­trial cap­i­tal, not as an inde­pen­dent class or eco­nomic dynamic. Finance capital’s pro­cliv­ity for trust build­ing and sim­i­lar preda­tory behav­ior was seen as bol­ster­ing the increas­ingly monop­o­lis­tic “rent-extract­ing” trend within indus­trial cap­i­tal­ism.
    Yet what has occurred over the past cen­tury is an increas­ing finan­cial dom­i­nance over indus­try, real estate and over gov­ern­ment itself. Grad­u­ally, finance came to be rec­og­nized as an autonomous dynamic mak­ing money purely by finan­cial means – as Marx put it, M-M’ rather than by invest­ing in the pro­duc­tion of com­modi­ties to sell at a profit, M-C-M’.”
    The past half-cen­tury in par­tic­u­lar has seen inter­est and other finan­cial charges absorb a ris­ing share of prop­erty rent, indus­trial prof­its, tax rev­enues and per­sonal income.”

    This is from the arti­cle already men­tioned on this blog.
    http://michael-hudson.com/2010/05/neoliberalism-and-the-counter-enlightenment/

    Will reassert­ing the “man­ual con­trol” like in the Soviet Union work? I don’t think so… Even the New Labour ver­sion of man­ual con­trol lite (Home Owner grants, home insu­la­tion, NBN, Emis­sion Trad­ing Schema, Inter­net cen­sor­ship) smells to me like yet another “way to serf­dom” maybe not a high­way like the Soviet one. But we have to ditch the illu­sion that neolib­er­al­ism and the dom­i­na­tion of global banks and cor­po­ra­tions does not lead to the state of “serf­dom” as well.

    It is just a slightly dif­fer­ent type of serf­dom.

    So what is the answer? I don’t know. Prob­a­bly down­siz­ing the finan­cial sec­tor, re-tun­ing the tax­a­tion sys­tem, replac­ing mon­e­tary pol­icy with fis­cal pol­icy com­bined with reassert­ing democ­racy but I am quite pes­simistic whether this will hap­pen. If we do not reassert democ­racy noth­ing will work.

  • Philip

    Dar­win houses out­strip those in New York

    THE aver­age Dar­win house is more expen­sive than its equiv­a­lents in Lon­don and New York, a com­par­i­son of real estate in cities around the world has found.”

    The arti­cle adheres to the typ­i­cal sup­ply and demand model.