OK, I can't resist getting the message out there through whatever means are available.

Here's a group of interesting articles and resources (further links, etc) concerning the housing boom, both in Australia and overseas. Unfortunately, it seems as though the negative gearing breaks and recent capital gains concessions, all coming from Canberra, have added fuel to the unaffordability fire, and caused an orgy of 'rational exuberance' amongst investors. Not many countries have such generous tax breaks for investment property, which is why the proportion of property investors in Australia is very high by comparison. (Forget about the myths of home ownership and social equality.) As people have pointed out, 'land value' is arbitrary, and it can be used to create a group of dispirited renters as a kind of pool of slaves who will never get into the market - the only chance for someone in the next generation is if they chose their parents wisely.

In the words of Macquarie Bank 'interest rate strategist' Rory Robertson: "If you owned two or three houses you just got a massive windfall; if you owned one you're basically square and if you owned none you just got screwed. And that, to some extent, was just an accident."

Or, in the words of Professor Michael Pusey of UNSW, this society is "burning up its social institutions for fuel" right now.

While even the most basic building structures are allowed to remain so over-valued, and soak up every single last cent of spare capital for stretched homebuyers, there will never be the goodwill or capital to put in green measures. Micro-economic narrow-sightedness, selfishness and greed by property purveyors simply cannot be expected to produce beneficial environmental outcomes.

How tax system egged on property speculation (SMH)
http://www.smh.com.au/articles/2004/06/28/1088392603764.html

Landlords and speculators reap billions from tax rule changes (SMH)
http://www.smh.com.au/news/Business/Landlords-and-speculators-reap-billions-from-tax-rule-changes/2005/04/17/1113676648176.html

Sydney and Melbourne homes just not affordable (SMH)
http://www.smh.com.au/news/Business/Sydney-and-Melbourne-homes-just-not-affordable/2005/04/13/1113251680813.html

Patrick's housing crash site (links to hundreds of international articles)
http://patrick.net/housing/crash.html#links

My advice to governments is to rapidly address the housing affordability crisis by regulating the market and doing price-controlled PPP developments where they more or less gift the land to the owner-occupiers buying into the scheme. Long-term price covenants would have to be put into place, and the houses would be earmarked to be owner-occupied, not rental investments. All these humane steps could be taken, but I don't think any Australian government is brave enough to do the right thing.

I've been looking at prices on fibro huts in the Bexley area for a laugh in domain.com -- it's generally $450 000 for an asbestos ridden 3 br hut with 1 bathroom, built shortly after WWII - fibro was used to keep the cost of construction down. The social capital and amenity of Bexley is inherently depressing, these prices make it doubly so. Talk about the emperor's new clothes. Forget about quality architecture, sustainable building, cross-flows, passive heating and cooling, etc, this is just bare survival for $450K.

Thus spake the market.

I forgot to include this link also, an excellent review of the Australian housing boom by the very well known Peter Saunders, who writes on a range of public welfare issues.

After the House Price Boom: Is this the end of the Australian dream?
Peter Saunders
http://www.cis.org.au/Policy/autumn05/polaut05-1.htm

I don't think widespread sustainable building measures will be possible until the govt acts to prevent profiteering in real estate land values by real estate agents, developers, and greedy baby boomers.

I personally don't believe there is a problem with supply and demand, it's more a problem of price-fixing, where the price-fixing cartel is made up of real estate agents and vendors, exacerbated by the 'ratchet effect' of excessive state govt stamp duty.

Further, it will be interesting to see what will happen when the current large generation of baby boomers starts dying off in large numbers in the next decade or so, leaving a smaller sized generation behind them.

This is an even pithier and to-the-point post by Professor Julian Disney, as posted on the National Summit on Housing Affordability website (http://www.housingsummit.org.au/). Note that the HIA co-hosted this event. For how much longer will we be asked to pay $450K for dilapidated fibro huts built in the 1940s?

Keeping the Dream Alive - Julian Disney
http://www.housingsummit.org.au/media/KeepingTheDreamAlive.pdf

and the Summit Call For Action: http://www.housingsummit.org.au/media/Summit_callforaction.pdf

(The Call for Action was prepared by the four non-governmental hosts of the Summit – HIA, ACOSS, ACTU and NHA. It is based on the experience and expertise of their many member organisations around Australia and on views expressed by the wide range of participants at the Summit.)

The cost of a serviced house block in inland country towns is about $10,000 and this can be assumed to be the raw cost of the product before the impact of scale, intensity, complexity and congestion turns it into a $250,000 block on the metropolitan fringe.

The problem is concentration of both inputs and outputs in a single dominant capital city. Devolve the political processes to new provinces or states and a portion of that future concentration will be dispersed to the new capitals. This will reduce the scale, intensity, complexity and congestion impacts on the remaining metropolitan population while delivering very low cost outcomes to that portion of the population that moves to the new capitals.

But are the metropolitan voters too narcissistic to recognise that they are entirely responsible for their own problems?

The problem is also price-fixing and greed by vendors and conditioning and brainwashing in the 'market model'. The housing market is highly permeable to fallout from failures in the stock market and other capital outflows. Governments make no distinction between owner-occupiers, investors or speculators, and real estate agents are free to ramp up prices any way they can, lie to buyers and sellers, use unethical practices at auction (including the method of auctioning itself), talk up a market-based approach to providing shelter, and so on - all inflationary measures designed to enrich only themselves and possibly the vendor. There are also (apparently) systemic inefficiencies from land allocation processes through to obtaining council approvals for construction, cumulative taxes, and so on.

The point is, Landcom (the state govt property development arm) is happy to charge 'market' rates for land, reflexively and without thought. Maximises returns to govt that way. Government flacks everywhere either aren't able to think (they have to hire consultants for that), or follow the brainwashed eco-rat market dominance line, as do councils. Not a good start...

Would you buy a 50 year old run-of-the-mill car for 10 x the price it originally sold for? Why buy an old Californian bungalow for 10 x the original price in the same condition then?

What's the end result of all the price fixing? The same result as if you were living in the darkest days of Soviet Russia, and possibly worse - shoddy housing at a high price. You can't tell me suburbs like Pagewood and Eastlakes in Sydney could in any way be held to be living...