Two upcom­ing prop­erty debates

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Sur­prise surprise–now that house prices are falling, whether they are going to con­tinue falling has become the topic du jour. I have been asked to take part in two debates on this–one an online Webi­nar orga­nized by Busi­ness Spec­ta­tor, the other a live lunchtime talk in Syd­ney organ­ised by The Money Insti­tute.

I’d enjoy hav­ing some Debt­watch read­ers involved in them both, so if you can make the webi­nar, or attend the debate, please do. Details are below (excerpted from the pro­mo­tional mate­ri­als).

Webinar: Where to for Australian house prices in the next 12 months?

When: Thurs­day, May 19, 2011 at 12pm AEST
(which is 10am for WA, 11:30am for NT, 12pm for QLD and 11:30am for SA)

Dura­tion: 45 mins

REGISTER NOW

Aus­tralian house prices are ‘the high­est in the world’ says the IMF, but is it true? We have recently seen some soft­en­ing of res­i­den­tial house prices, espe­cially in Vic­to­ria, but there are also signs of weak­ness in other regions, par­tic­u­larly those which are not directly linked to the min­ing boom.

Is it the reck­on­ing the bears have been wait­ing for, or sim­ply a soft patch in a wider accel­er­a­tion that will con­tinue thanks to a ris­ing pop­u­la­tion, a short­age of hous­ing stock and the pow­er­ful long term effects of neg­a­tive gear­ing.

Busi­ness Spec­ta­tor has gained a rep­u­ta­tion as one of the prime debat­ing are­nas over house prices in the Aus­tralian media. Join Man­ag­ing Edi­tor James Kirby, econ­o­mist Steve Keen and HIA’s Harley Dale to hear what lies in store for the next 12 months.

REGISTER NOW!

Don’t for­get, this avenue is a great way to have your ques­tions answered in real time — you can sub­mit them dur­ing the webi­nar via a panel on the screen.

Be quick to reg­is­ter as there are a lim­ited num­ber of places avail­able.

We hope you attend and we look for­ward to answer­ing your ques­tions!

Best Wishes

The Busi­ness Spec­ta­tor Team

Will the Australian Property Market Crash?

Brought to you by The Money Insti­tute & Live Debt Free Aus­tralia

Proudly brought to you by: www.livedebtfree.com.au and www.moneyinstitute.com.au 

The Great Prop­erty Debate – Panel Com­ments

Ris­ing mort­gage debt caused the house price bub­ble; now that debt has peaked, the same force that drove house prices up will drag them down

Pro­fes­sor Steve Keen, Uni­ver­sity of West­ern Syd­ney & Debt Watch

Many of the tell tale signs of a bub­ble are not present and just because house prices are over­val­ued doesn’t guar­an­tee a bust

Shane Oliver, Chief Econ­o­mist, AMP Cap­i­tal Mar­kets

Aus­tralian hous­ing is a giant Ponzi scheme inflated by an unsus­tain­able credit-fuelled boom. The bust has already begun and is unstop­pable

Kris Sayce, Edi­tor & Chief- Money Morn­ing Pub­li­ca­tion

House price crash talk isn’t new and it con­tin­ues to be more suc­cess­ful than any other topic in gen­er­at­ing sen­sa­tional head­lines that scare the liv­ing day­lights out of peo­ple. There are many chal­lenges fac­ing the Aus­tralian res­i­den­tial sec­tor, includ­ing the need to aid entry level buy­ers and rental house­holds. The focus should be on what needs to be done to alle­vi­ate upward pres­sure on dwelling prices

Harley Dale- Chief Econ­o­mist, Hous­ing Indus­try Asso­ci­a­tion

Big dif­fer­ences of opin­ion by the lead­ing experts. So come and hear both sides on the debate onan issue that affects every Aus­tralian with an inter­est in prop­erty & make up your own mind.

When: 7th June, 2011 from: 11.30 Reg­is­tra­tion for 12pm start to 2.00pm

Where: Wes­ley Cen­tre, 220 Pitt St, Syd­ney. Info Hot­line: 02 8004 2444

Reg­is­ter online: (lim­ited seats avail­able) click on link below to go reg­is­tra­tion page:
http://live-debt-free.com.au/money-talk-events/icalrepeat.detail/2011/06/07/41/-/propertybubble-crash-debate.html

The Debate Panel

  • Harley Dale- Chief Econ­o­mist- Hous­ing Indus­try Asso­ci­a­tion (HIA),
  • Shane Oliver- Chief Econ­o­mist-AMP Cap­i­tal Mar­kets,
  • Amanda Lynch, CEO of the Real Estate Insti­tute
  • Pro­fes­sor Steve Keen- Asso­ciate Pro­fes­sor-Uni­ver­sity of West­ern Syd­ney N.S.W
  • Kris Sayce-Edi­tor & Chief-Money Morn­ing Pub­li­ca­tion
  • David Col­lyer- Man­ager Direc­tor-Pros­per Organ­i­sa­tion

About Steve Keen

I am Professor of Economics and Head of Economics, History and Politics at Kingston University London, and a long time critic of conventional economic thought. As well as attacking mainstream thought in Debunking Economics, I am also developing an alternative dynamic approach to economic modelling. The key issue I am tackling here is the prospect for a debt-deflation on the back of the enormous private debts accumulated globally, and our very low rate of inflation.
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  • ken

    It’s fine, we are going to pay ever higher rents to fund higher prop­erty val­ues. Maybe peo­ple will sell their chil­dren into slav­ery or they will have to help pay off the house loan, which is much the same thing.

  • sir­ius

    @Ken

    The time is way over­due for a new “par­a­digm”, where I use the fol­low­ing mean­ing for par­a­digm…

    A world­view under­ly­ing the the­o­ries and method­ol­ogy of a par­tic­u­lar sci­en­tific

  • Go Steve ! Between Steve Keens insights to the real dynam­ics of prop­erty debt and David Collyer’s solu­tions (end all tax, and fund gov­ernem­ment by unim­proved land and com­mon resource rent) there is a clear answer, but to the vested inter­estes it is an incove­nient truth and they will fight to their last peas­ant. Mean­while, the last time Shane Oliver was right about the future was def­i­nitely NOT before the GFC when his learned bul­letins told us that the high share val­ues were per­fectly OK. His employ­ers, the AMP got it totally wrong before the 1987 crash too. Maybe they need a dif­fer­ent method­ol­ogy. Should be inter­est­ing.

  • sir­ius

    By chance I came across a “catchy” video…

    This short video explains our Plan B for pub­lic ser­vices and the UK econ­omy:”

    http://www.onegoodcut.org/?autoplay=1&utm_source=Positive+Money+Newsletter&utm_campaign=c5aa1faaad-PM_OGC_Launch&utm_medium=email

    Disclosure:In some ways I no longer agree with this video — not because of what it pre­scribes but for what it omits.

  • sir­ius

    Con­trast that last video with Max Neef

    (see 28 min 10s onwards — about 20 mins)
    http://www.democracynow.org/2010/9/22/chilean_economist_manfred_max_neef_us(

  • sir­ius

    And then the Max Neef video with this one…

    Jared Dia­mond — Col­lapse! part 2
    http://www.youtube.com/watch?v=-lrZRewTt6A&feature=related

  • sir­ius

    I feel like say­ing some­thing…

    Nowa­days that which should be val­ued the most is val­ued the least”

    That’s it. Have a good day

  • ralph 11

    There’s a lot of dis­cus­sion in the main­stream news media in Canada about the mas­sive (total) debt the United States has, but so far I have not seen any dis­cus­sion of the mas­sive (total) debt we in Canada have, a mas­sive (total) debt that is sky­rock­et­ing higher at a very alarm­ing rate as we speak. The politi­cians and the main­stream news media absolutely refuse to dis­cuss this issue.

    (Click on the link at the end of my post to find the links which back up all of the sta­tis­tics I am using in this post.)

    The total Gov­ern­ment (Fed­eral, State, and Local), busi­ness, and house­hold debt in the United States is 52.6 tril­lion$.

    The total Gov­ern­ment (Fed­eral, Provin­cial, and Munic­i­pal) busi­ness and house­hold debt in Canada is 4.51 tril­lion$, and it went up an eye-pop­ping 248 bil­lion$ over the last 12 months. To put things into per­spec­tive the (Cana­dian) Fed­eral Government‘s pro­gram spend­ing in the year 2010 was 245 bil­lion$

    Since the United States‘s pop­u­la­tion and gdp are approx­i­mately 10 times higher than Canada‘s, there is not a lot of dif­fer­ence in the total debt num­bers in the USA (52.6 tril­lion$) and the total debt num­bers in Canada (4.51 tril­lion$), rel­a­tively speak­ing.

    The total Gov­ern­ment (Fed­eral, Provin­cial, and Munic­i­pal) busi­ness and house­hold debt to nom­i­nal gdp in Canada is 278%. 

    In the year 2010 the total Gov­ern­ment (Fed­eral, Provin­cial, and Munic­i­pal) busi­ness and house­hold debt in Canada grew 2.46 times faster than its nom­i­nal gdp (econ­omy) did. 

    Our econ­omy is one big ponzi scheme, and a “day of reck­on­ing” is just around the cor­ner. When it comes, it is not going to be very pretty. 

    http://www.bloggingtories.ca/forums/topic10119.html

  • Doug

    I believe the time to declare Cash Is King is near. To those hoard­ers of cash, we are finally on the win­ning side with inter­est rates ris­ing glob­ally and house price falling locally.

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  • Steve,

    My prin­ci­pal objec­tion to your Multi-Sec­toral Model is your equa­tion (1.6)
    K/v = Y where K is phys­i­cal cap­i­tal and Y is phys­i­cal out­put. Since Y = MV/p is a func­tion of the price level, then K/v must be a func­tion of price level as well. Since K is phys­i­cal cap­i­tal (inde­pen­dent of p) then v must be = v℗ = pv(1).

    To put a fine point on it, do you reject the exchange equa­tion pY = MV? Why?

    I attach the so-called which is drawn from BLS data and shows d(GDP)/d(debt). How do you explain it? It is sim­ply 1/v℗ ie. ,
    1/(pv(1)) is it not?