I disagree wholehartedly with your article.

As a 25 year old I should be the first one to whinge about housing affordability. The fact is, it has never been easier. her are a few reasons why:

1. With an agressive lending market offering up to 106% finance, the emergence of new loan products and the like mean people have the best opportunity in modern history of accessing funds.

2. With petrol costs rising, the flow on effect for building costs, land development costs and the like will ensure property will continue to increase in value, meaning that by governments assisting further with public housing not only do they face significant costs but it creates a 2 tier system where those in public housing never have the need position themselves in the continually rising property market.

3. As property is the basis of wealth for most Australians, you are discouraging and robbing these people of a fundamental asset that will assist in their prosperity.

4. In 2025 when there is 1 retiree for every 1 tax payer, I hope that people have taken the initiative and have invested in property to assist in funding their retirement. This also allows the rental housing need to be met.

At this point in the property cycle, affordabiltiy is at its lowest. rest assured it will change, as wages rise and property growth continues, rental growth will slow as people will be able to enter the market, allong with the government providing an incentive to kickstart the boom such as an increased first home buyer grant.

I find it appauling that you are in a position to discuss these issues without any real insight on the topic. its ok to go into bat for poor Australians, but you will keep them poorer by providing a roof over their head and robbing them of the need to enter the property market.

You might win a naive voter though, if thats your angle...

I would have thought the housing affordability crisis was simply a function of too much demand for a restricted supply of land. Now the restriction on land supply is caused directly in most cases by State and then local governments artificially resticting the new land to be made available for house building. The research shows that the actual cost of building a house has in adjusted dollar values gone down in the last 20 or so years, but the cost of the land component has gone up manyfold. In adjusted dollar terms probably 3-5 or so times. (not sure about that actual quantum but anything more one times in adjusted dollar terms in a land with land to spare everywhere is a reflection of the Government influence in restricting the supply of available land). Accordingly whilst it would be nice to see the relief of Government charges on house prices, the solution is actually a lot easier. Work out a town plan then simply let anybody who wants to, within that town plan open up and develop the land for house building without the costly beaurocratic delays and restrictions that ramp up the development costs.

Andrew,

don't you think we need a national population policy before we prepare a national housing strategy?

Writing as a 26 year old mortgage-hoder.

In response to Realist: yes, we can borrow a lot more money. But houses cost so much within a reasonable distance to the CBD (if you don't want to place yourself at the mercy of rapidly rising petrol costs), that the amount you need to borrow to buy a small family home places far too much pressure on people's incomes. The repayments go far beyond the 40% of income recommended as an absolute maximum. Being able to borrow 100% of the purchase price of a half million dollar 3 bedroom, one bathroom house, is not "affordability".

In reply to ghaycroft: the last thing I want to see is more land being opened up on the city fringes (of Melbourne, at least). It is already a full hour's drive from the outer suburbs to the city centre where many jobs are located, and the prospect of a 1.5 hour drive to the city every day for work, just to buy a new home, is a very lopsided view of priorities. I would personally far prefer to see high density living being encouraged with sensible planning and public transport in the inner and "middle" city - the 10km band surrounding the city centre.

Take the good with the bad.....

As a mortgage holder, you should be lapping your current equity depending on when you purchased.

Yes its unaffordable at present, but there are some fantastic buys and if you buy during a moving market the affordability is sufficed by increases in equity and the power of growth from your leveraging.

As a person who lived for 13 years in housing commission dwellings growing up, i can tell you from the inside the attitudes generally of the people who are provided this housing are far from being in line with people wanting to get ahead.

They often 'expect' housing to be provided for them, not the correct attitue that government gousing is a privelidge, and they look after it the way anyone would who does not have the respect that comes with ownership.

It might be unaffordable, but the basis of wealth for Australians is home ownership and i would rather see prices and affordability here than the alternate. We are just in a phase of a cycle for goodness sake, in 5 years we will be saying how great this current time was.

Discouraging people to get ahead by way of providing permanent goverment housing reliant on 25% of household income as rent means there is implications if they work therefore discouraging many from doing it and no need to yearn for the security and financial benefit that derives from home ownership, as they have a home for life.

We dont need more ghettos, we need more encouragement for them to get off their ass and make things happen as they are riding a gravy train at the moment that discourages them from crossing out of thier marginal lives. The democrats cannot expect to get anywhere when they only look for band aid solutions like this.

Its people with philosiphies like this who keep the generational cycle of poverty going.....Thanks alot.

I see a fundamental difference of opinion between Andrew Bartlett and Alan Moran http://www.onlineopinion.com.au/view.asp?article=4811.

Andrew calls for the sorts of recommendations made by the Productivity Commission, while Alan thinks that “The excessive costs are purely due to government rationing of land” and calls for the much freer release of land as the essence of the solution.

I have no doubt that with the right sort of tax arrangements and other financial incentives, the problem could be largely solved. But of course, this would mean a redistribution of wealth to a fair extent away from the rich and powerful real estate moguls and profiteers, and towards the battler, or more precisely the average citizen. And therein lies the problem - governments are just far too close to the big end of the property market.

Freeing up the release of land as a solution must be condemned, in this age of concern about urban sprawl and sustainability. Governments should be encouraged to be very careful about land releases, and to plan for limited releases that carefully wind down towards an overall limit to urban expansion, within their strategic planning processes.

--
last word,

Yes we definitely need a national population policy. We cannot escape the ultimate driving factor of high demand for housing – high population growth – which neither Alan nor Andrew have considered at all in their articles.

"As a 25 year old I should be the first one to whinge about housing affordability."

No Realist, you should not. It is income related not age related.

If you earn the minimum wage (for arguments sake $500 per week)how do you make the $832 weekly repayments (100%, 30 year mortgage on the median $500,000 house). If you make the average (about $1000 per week) $168 left to live on.

The housing cycle does have its ups and downs, at present we are in a slump (if you exclude WA) with house price increases less than inflation. People in Sydney with negative equity are being advised to "walk away" from their homes.

GST and the $14,000 first home owners grant raised the price of a new house by $30-40,000 overnight, real estate agents are charging a percentage of the sale price as commission.

There is no point in having 100% equity in an asset if you cannot sell it because nobody can afford to buy it.

Realist

Yes there is an aggressive lending market and it is very easy to obtain funding. But is this good in a regime where prices are artificially much higher than they should be? It is all too easy to lock yourself into big payments for decades, and in a rising-interest-rate and rising-prices-of-everything regime.

“As property is the basis of wealth for most Australians, you are discouraging and robbing these people of a fundamental asset that will assist in their prosperity.”

Eh? This is happening now. This is exactly what Andrew Bartlett is concerned about.

“I find it appauling that you are in a position to discuss these issues without any real insight on the topic.”

But…. anyone and everyone has the right to raise these issues, regardless of how well versed they are in them. Crikey, we don’t want to restrict article writers to only experts, do we? That would eliminate practically all politicians for a start! And we need to encourage our pollies to partake in discussions on this forum.

--
ghaycroft,

“Work out a town plan then simply let anybody who wants to, within that town plan open up and develop the land for house building without the costly beaurocratic delays and restrictions that ramp up the development costs.”

One of the core purposes of a town plan, in towns that have growth pressure, is to carefully regulate land releases, and certainly NOT just free them up. Land releases need to go hand in hand with infrastructure development, service-provision and an overall plan that considers population pressure, environmental impacts, etc. Thus, land releases need to be very carefully managed.

Freeing up land for housing is not the answer.

Perhaps Andrew is wrong.

Perhaps home/unit/appartment ownership will, in the future, be a for the lucky elite. Let's face it, the egalitarian ideal of home ownership is only a recent occurance in history - a failed social experiment.

In response to some of the comments:

I think Realist's assessment will deliver a nation sharply divided between those who own housing/property and those who don't. The gap is already getting quite large. Stopping housing from becoming (more) excessively expensive does not "rob property owners of a fundamental asset that will assist in their prosperity" - it stops many people who can't afford to get into such investments from becoming impoverished just keeping a roof over their heads.

The other point is that the public purse already heavily subsidises housing investors, who broadly speaking are the wealthier Australians. We spend far more through forgone revenue with negative gearing exemptions than we do on public and community housing. Rather than take an ideological position of private good/public bad (or vice versa), we should look at what is the best and most efficient way of using that public money. A previous Industry Commission report suggested public housing was the most efficient, and I imagine that analysis would still hold. However, changing the mix in the various subsidies and incentives - rather than supporting only one or two - would probably produce the best results.

Of course, if it was proposed to just abolish all forms of government support for housing, including all grants, tax discounts, deductability, etc, the screams from the top end of town would easily drown out the cries from those in public housing.

As for having population policy, I've always been in favour of that. However, we already have a good idea of what the population is likely to be in the next 20 years, and where the growth is likely to happen, which is sufficient to develop a national housing strategy on. Decisions can be made that will change population projections and location, but that shouldn't stop us planning a strategy now based on what is likely to happen.

A national housing strategy should have environmental sustainability built into it as a matter of course, but if people can't afford to even get into secure and appropriate housing in the first place, then it's a bigger problem.

'Realist', I can see three blatant contradictions in your arguments so far! Keep it up, for my amusement please.
Fact - regardless of the middle-class welfare of negative gearing, house prices cannot eternally grow faster than wages. Over a very long term, they will simply track wage growth, with fluctuations above and below this long-term growth average. Today, they are well above any rational valuation. This is the result of many years of growth above the rate of wage inflation. The implied future is for growth below the rate of wage inflation. Most likely 'negative growth' - as in, falling nominal prices, but possibly just decades of stagnation. Either way, borrowing costs (interest) will exceed capital gains.

"As property is the basis of wealth for most Australians, you are discouraging and robbing these people of a fundamental asset that will assist in their prosperity."

No, it is these very 'fundamental assets' (or the associated debt) that will result in many tens, perhaps hundreds of thousands of families losing their homes. What is the current figure in NSW? Around 5,500 from memory and a 50% increase in a year!

"I hope that people have taken the initiative and have invested in property to assist in funding their retirement."

How does a loss of ten or twenty or five-hundred thousand dollars "assist in funding their retirement."

You're far too young to remember anything but a booming economy. Ideal fodder for the perfect storm that is approaching. Watch and learn.

F.

It's a little disappointing to see, yet again, the chorus of comments from those who believe the silver-bullet solution Australia's problems is population control.

The thinking seems to be:
Q: "Why does this problem exist?"
A: "People!"
Q: "What's the solution?"
A: "Fewer people!"

Unfortunately that notion, with its circular logic and its one-dimensional outlook, could be applied to just about any issue you can think of, so it has zero analytic power as a means of comparing the value of different possible solutions.

But I guess when the only tool you have is a hammer, everything starts to look like a nail...

Well spoken Mercurius. Population growth has nothing to do with the problem. There is no significant correlation between real house price increases and the rate of immigration. But let's not let this get sidetracked. The issue is housing affordability, not xenoph... oops, I mean immigration.

Property, whether we like it or not, is part of our economy.

The suggestion that "housing ... is [a] basic human right" appeared on the "let's have a Bill of Rights" thread too.

Where does this all suddenly come from? Isn't our economy based upon capitalist principles? When did it suddenly become tacky to own, or aspire to own, ones own property?

But more to the point, underneath the warm-fuzzy "wouldn't it be nice if everyone was nice to each other" logic, the whole idea is preposterous beyond belief.

If we suddenly decided that owning a home is a basic human right, where does that leave the millions of people who have scraped and scrimped and sacrificed to buy their own? Should they be compensated? Or perhaps they should be punished under the principle "property is theft"?

If we decide that owning a home is a basic human right, how do we allocate them? Say the government builds "citizens houses" in Broome, does it then have the right to send the citizens there to occupy them?

Having a "crisis of affordability" is one thing. Turning society upside down in a futile attempt to "solve" it is another.

The entire article is misguided idealism, of the kind one would expect from a bright eleven year old who also thinks that all wars could be avoided if people just talked to each other.

I'm going to posit that people seek to maximise their standard of living. I doubt many will disagree with me.

Ones home is a major determiner of that standard, so it seems to me that people will tend to spend as much as they can afford (or think they can afford) on their housing, whether it's by way of buying a house, or renting somewhere.

The mechanism of supply and demand then requires that house prices and rent levels will be set such that they remove from the population all of their income except that which they otherwise need to provide a standard of living commensurate with the standard provided by their housing.

From that perspective it seems apparent that nothing that a government does by way of alterations to the taxation system can change the situation. At most, it can shift the division between owner occupier housing and rented accomodation, but causing economic dislocation along the way.

That said, the market is inefficient, in that it does not result in the best use of the accomodation. In particular, people who have retired continue to occupy housing relatively close to the city that could otherwise more usefully be occupied by people who are working in the city. The obvious answer to that is to force retired people to move away from the city centres, either directly through statutory compulsion, or by taxation. Of course, it's politically impossible, and will never happen.

As something of an aside, it bothers me that the inflation rate is managed by the RBA by way of interest rate changes. No doubt it's convenient for the government that they can apportion the 'blame' to someone else when rates go up (while still taking the credit when they drop), but it does not spread the pain equally. If heat needs to be taken out of the economy, it would be more efficient to do that by raising tax rates. Again, it's not going to happen.

Our own state Govts have been the biggest offenders in pushing up the cost of houses with stamp duty,taxes,over regulation,just plain stupidity and woeful planning.

Firstly release more land in the outer suburbs and service them with rapid transport systems.Stop employing more bureaucrats and put the money into infrastructure.We have 3 times the number of PS per head compared to NZ.There in lies our greatest waste of public monies.Let young people access their super as a deposit for their first home.

Sydney has painted itself into a corner if insufficient,ill planned transport infrastructure.Our State Govts just push for more urban consolidation with no planning for transport.If our traffic continues to be in a state of gridlock,business will leave and this city will embark on the slow process to decay.

It takes a really smart Govt to take the most prosperous State in times of economic boom and turn it into a basket case.

We not only have a woeful lack of talent,but also lack people with the courage and a vision for the future.

This is article is much the same as one by Kim Carr (31/7). I repeat my comment from there:

Government interference in the housing market to improve affordability won't work; it will cause prices to rise further by increasing demand, so erasing the intended benefit. That's what happened with the first home buyer's grant. Abolishing negative gearing won't work either. Keating tried it in 1985, only to find it created a severe rental property shortage, hurting the very people the policy was supposed to help. The fact that house prices rose so much and so rapidly from 2000, it is inevitable that they will fall. This is already happening here in Sydney, where I don't see prices rising for at least 4 years. As an investment residential property is hopelessly unattractive. To attract a rational investor, either house prices must fall or rents must rise.

There are other options to improve affordability in the long term that actually work:
(1)Abolish stamp duty, which encourages house price inflation as vendors 'pass on' the stamp duty that they originally paid to the purchaser.
(2)Eliminate immigration. As long as migrants continue to come here, there will be less and less land per person. Prices must therefore keep rising. Without immigration and a zero population growth rate, land prices will remain static.

Arjay and ghaycroft have both raised the furphy that housing unaffordability is a simple matter of supply and demand. Just get the State Government to release more land and bingo, houses will be more affordable.

Today the Sydney Morning Herald published another in a series of articles about the house price crash in Sydney's west and south-west. If the State Government were to release more land for housing, where would a lot of it be? That's right, in the west and south west. Where there is a supposed 'land drought' at the same time as falling house prices? Does that support the 'release more land and reduce prices' argument? Hardly.

At the same time, prices are rising again in other parts of Sydney, such as the eastern suburbs, the inner west, the upper north shore, so can the 'release more land' brigade explain how releasing land on the outer urban fringes would make houses more affordable in these established suburbs? The market for new land and houses in the urban fringes and the house market in older suburbs are and always have been separate markets. There is no reason to believe that releasing more land would have much impact on house prices across the major cities.

This 'release more land' call was being made just last week by none other than the Prime Minister. Couldn't be anything to do with him trying to escape blame for the impact of the latest interest rate rises, now could it? It's all the State Governments' fault, apparently. And the fact that the State Governments are all of a different party to the PM, pure coincidence of course.

Why do people buy this political spin?

Mr Bartlett

Thank you for your article. Also, thank you for your responses. You are one of the few politicians who ever reply to posters on OLO.

This is not a read herring. It is real. For the past three months I have been working for a community mental health NGO. The biggest issue is housing and accommodation. The number of people who cannot afford housing is unbelieveable. The numbers of homeless people with mental illness is overwhelming - frightening - and disgusting. Federal and State Governments should be taken to task - as should the Democrats.

A mental health consumer pays $150.00 per week to sleep on a lounge. Food is not included. He gets $200.00 per week for his
Disability benefit.

No wonder he ends up homeless every other week.

I will be interested in your reply to this post.

The above posters are so lucky that they do not have a protracted mental illness and nowhere to live.

Cheers
Kay

You raise a number of very good points Kay.
The fact is that there are thousands of people around our country sleeping rough or couch to couch each night whose income simply cannot cover reliable rent and food, let alone any extras for health problems, transport or clothes for job hunting, etc.

This situation is both a cause and symptom of mental illness - it won't be fixed by modfying negative gearing (apart from possibly freeing up some funds that could be better spent on HACC or other programs).

However, it is also a reminder of why extra public investment in secure appropriate housing is worth it. People with mental health issues live in our community, mostly with little problem. However, if they have problems falling behind on rent, lose their job or have a bad patch, they can very quickly slip into homelessness if there is not proper support. Once you're listed as a rent defaulter, it can make it very hard to rent a place again, even in public housing sometimes.

The issue does bleed across into some shortcomings in our mental health system (and attitiudes), but your chances of overcoming or living effectively with a mental illness are increased dramatically if you find affordable, secure and appropriate housing.

All another reason why it's about a lot more than just let the market ride, and also why it needs a holistic national approach to the problems.

Andrew Bartlett's self serving rationalisation does nothing but expose the Democrats as a party of PROPAGANDA.

Don Chip would be ashamed that the party charged with 'keeping-the-bastards-honest' is so intellectually and morally corrupt that it believes the Australian populace are willing to accept this propaganda.

Australian's KNOW:

* At least 90% of migrants will go to Sydney and SEQ no matter what ill conceived and costly government regulations AB will espouse.

* I want to live in Castlecrag and it should be MY fundamental human right to do so. I can't and neither can planeloads of migrants expect to live in environmentally, infrastucturally unsound new suburbs in Sydney or those in SEQ.

* More must be done than just making all states provide land and houses. You must stop development in SYDSEQ to enable the other states to be able to attract new migrants. It suits the senator from Qld to import HIS own votes enmasse. Eternally grateful new Democrat voters. He knows they all go to SYDSEQ. Hence, prima facie his article is contrived propaganda.

* House prices go up is because of negative gearing. Negative Gearing makes housing an INVESTMENT commodity. AB's article says housing must be the 'most fundamental of human rights', then insists Negative gearing is fine. Why? The two are totally incompatible. So does AB have a 'cake-and-eat-it-too' vested interest here?

In summary the article is clumsy and unrealistic propaganda that should easily be spotted by average Australians. Australians who will now realise the Democrats are intellectually and morally corrupt.

We urgently need 'Research' at a national level. Allover SYDSEQ', in communities like Castlecrag, people have EARNED the right to quiet enjoyment and maintain that right through nationally relative high prices.

There is plenty of room for cheap housing in Melbourne, Canberra, Adelaide, Perth, Hobart and Darwin. Its time migrants were forced into those cities by limiting housing supply in SYDSEQ. And property developers and their political puppets be damned if they can't adapt to our will.

Housing affordability is all about economics. Economics demand growth to remain sustainable, but continuous growth is unsustainable, it relies on resource and consumption growth, which is finite. A point's reached when the balance between economic growth, sustainable supply, consumption growth, infrastructure limits and environmental devastation, reach their peak point. As with oil, its all down hill then.

“A national housing strategy should have environmental sustainability built into it as a matter of course, but if people can't afford to even get into secure and appropriate housing in the first place, then it's a bigger problem.”

Andrew, to have sustainable housing, requires all housing to have longevity and be environmental and energy sustainable. Without those factors, nothing is sustainable, just consumed and unsustainable replaced. But your interests lie in centralised economic control, not sustainable life.

Housing affordability will again come about once we remove the current system of unsustainable economic growth and environmental destruction, and build houses that work within the environment, not against it.

Whilst we continue to build smaller and smaller boxes, for more and more money and place more strain on already collapsing infrastructure. There'll be no answers, just elite attempts to hoodwink us with semantic rubbish and self-righteous dogma. Yet the facts show the elite have placed us on a downhill spiral, with no answers other than drastic change.

Builidng more houses won't help, until we get the direction and sustaibnabe method of our operating our society in order.

In todays Age Tim Colebatch argues that demand for housing is directly related to the numbers of investors in the housing market. He says that recent taxation changes will make investment in rental property less attractive in the longer term.
Refer http://www.theage.com.au/news/tim-colebatch/safe-as-houses-no-more/2006/08/28/1156617272592.html

Wow Mercurius, I count two posts amongst the thirteen preceding yours in which population was mentioned as one possible causal factor! Methinks you rather grossly overstate the situation with;

“It's a little disappointing to see, yet again, the chorus of comments from those who believe the silver-bullet solution Australia's problems is population control.”

You accuse people who care about never-ending pop growth of having a simplistic viewpoint. Well, your questions clearly show that it is you who has the extraordinarily simplistic impression of their viewpoint.

--
Foundation,

“Population growth has nothing to do with the problem.”

Now who do you think you are kidding?

And you ought to be thoroughly ashamed of yourself for dishing out the disgusting and extremely unintelligent diatribe that anyone questioning high immigration must be “xenoph….”.

“oops” is right mate.

Andrew Bartlett,

I am pleased that you see merit in a population policy. But then you say that we have a pretty good idea of what growth is likely to happen… which pretty well means that you don’t see much merit in developing a population policy, at least as it pertains to housing and the affordability thereof!

While I basically agree with you on this housing issue, our past strong disagreement again surfaces. I refer to;

“However, we already have a good idea of what the population is likely to be in the next 20 years, and where the growth is likely to happen, which is sufficient to develop a national housing strategy on.”

and...

“A national housing strategy should have environmental sustainability built into it as a matter of course”

For goodness sake, how obvious is it that if we just sit back and accept the scale of population growth that we look like getting in the next 20 years, then we will be a million miles away from achieving sustainability, no matter how good our ‘technofixes’ might be.

Ludwig, just because I support a population policy, doesn't mean I support <i>your</i> population policy. As you know, I support Australia having a higher population level than you do. I believe this level of population can be sustainable and you don't.

None of that means that it is not possible to develop a national approach which produces sustainable and affordable housing that takes into account what the population level will be under current projections. If in doing so, serious constraints emerged as a direct consequence of the projected population level, then it would be necessary to consider whether to modify the population policy

I don't expect it would mind you, (although it may well suggest a strong need to encourage internal migration into different regions within Australia) but you can't know for sure until its done on a nationwide level).

Don Chipp,

If any of the Bastards get to heaven, you give'em Hell.

Cheers

Ludwig, house prices have nothing to do with immigration. If you disagree that this is fact, please provide some evidence or at least a logical argument. I have done the analysis personally, and there is NO statistically significant correlation between RATES of house price inflation and RATES of immigration (1). Yes, over time, house prices have risen, and over time our population has grown, but this is meaningless. To jump from these two unrelated pieces of information to “immigration causes higher house prices” is ludicrously illogical, and surely reflects an underlying bias of the person making such claims? Either that or just an inability to process two simple pieces of data separately…

Let’s see. Cane-toads have become far more prevalent (due to breeding) in Australia over the last 30 years, while house prices have been rising. Ergo, it is love between a man toad and a woman toad that has made houses so unnaffordable! Wow, this is easy! Oh crap! No, wait, cane-toad numbers have been rising at the same time as our population has, therefore, cane-toads cause immigration! This must be stopped…

Hmm, perhaps I have a psychological bias towards blaming cane-toads… If this was a bias toward blaming immigrants from other countries, it might look like I didn’t like foreigners…

Here’s a test – If overpopulation is the problem, not foreigners, how about we enforce limits (or reduce welfare) to lower the birth rate of Australian women by 110,000 per annum (to around 150,000), thus offsetting the net gain from immigration? I know, it sounds stupid, but if it makes you angry, perhaps you need to dig a little deeper.

Enough!

The primary cause of rising house prices over the last 30 years has been inflation. Net of inflation, house prices have grown at an average rate below 2% per annum over that period (2). Recently, house prices have grown far in excess of inflation. This is entirely due to a massive capital misallocation, enabled by lax lending standards and unlimited debt creation,and encouraged by the middle-class welfare that is negative gearing.

A mountain of debt is the legacy, and the forces it will apply to our future economic growth will eventually result in more affordable housing. So let’s just let let things be. Up to now, government intervention has only ever ADDED to the market distortions (FHOG, stamp duty relief, etc). The one change they could make that would REMOVE a distortion, it would be to quarantine losses from holding rental property against income from rental property. This would also save hard working honest tax-payers almost 4 billion dollars this year (and rising).

If the politicians can’t do that, lets just hope they leave bad enough alone and let the market collapse under the weight of its own debt.


(1) Using population growth figures from 1971-2004 from the ABS (www.abs.gov.au) and house price growth figures from Abelson & Chung (2004), appendices.
(2) Peter Abelson and Demi Chung, Housing Prices in Australia: 1970 to 2003; Macquarie University 2004

Foundation said "lets just hope they leave bad enough alone and let the market collapse under the weight of its own debt".

Ouch! That would be catastrophic. Lots of B-Boomers would loose their retirement nest eggs, but their grand-kids might be able to buy a house - if they had a job!

Personally, I blame TV and the plethora of programs that talked up the market. How anyone could buy property, paint a room or two, and sell it for thousands extra. This encouraged, not just speculation, but outright predatition.

Andrew is right in some respects. Housing (or more correctly Shelter) is a fundamental human "need". It therefore has what an economist would call a low-elasticity in demand (like cigarettes to a smoker - price increases dont necessarily affect the demand significantly).

To adjust the market to make housing more affordable for non-home owners would mean that investors would suffer. That is why the first home buyers grant was introduced, but it failed when prices went up for reasons others have writen above.

I would be interested to know what Andrew figures Australia's Ideal population to be. How often do you see lawns watered in Canberra when you are there Andrew? Doesn't Canberra now have PERMANENT Water Restrictions? Just next door, Queanbeyan, Yass and Goulburn have no water to speak of at all. Corin Dam just outside of Canberra was supposed to hold 30 years of water....

And what happens, Andrew, when the oil runs out in a few years. It may be 2015. It may be 2008, it may be 45999 - but it WILL run out. How many people can Australia sustain with an 1800's style economy? How do people in Penrith or Paramatta get to work in Sydney CBD?

Ludwig is correct - the growth is not maintainable.

<humour>

Foundation has done us a great service in pointing out the insidious link between cane toads, house prices and immigration. But get this:

Since women got the vote, we've had two World Wars!

Now, what does that tell you?

</humour>

Mr Bartlett, vis a vis Andrew

When you go to Mr Chipp's funeral - let him know that I voted for his new party a couple of times, and let him know that he will be sadly missed.

With sadness
Kay

So PK says that the price of housing like other commodities is not primarily related to supply and demand?Well PK our seemingly most knowledgable economist,why did the price of oil go up recently?

Really, PK must be one of these bureaucrats whose logic tries to defy the law of gravity because they are too afraid of losing their status,perchance reality decends upon them.Bureaucrats remember,don't loose their jobs,they just ascend to a higher level of incompetence.

This is why NSW is in such a mess.

Narcissist, you are confusing two concepts.

>>Housing (or more correctly Shelter) is a fundamental human "need". It therefore has what an economist would call a low-elasticity in demand (like cigarettes to a smoker - price increases dont necessarily affect the demand significantly).<<

Shelter is a fundamental need. Housing on the other hand is a lifestyle choice, dictated by our ability to pay.

The major factor in demand elasticity is substitution: a humpy in Birdsville is not a substitute for a Toorak mansion, so the demand curve for shelter is entirely different to that for housing. They are totally different markets.

If the government were to address the homeless problem by providing every sufferer with shelter, free of charge, it will have absolutely no impact on the price of a house in Elizabeth Bay, Doncaster or Broome. No new money has entered or left the housing system, and the accommodation built for the purpose of shelter for the homeless does not add to the stock of property-for-sale.

Once more, with feeling: do not conflate the property market with the welfare system.

OK, Arjay - let's just accept your argument that it is ONLY a matter of simple supply and demand - I was trying to argue that other factors can affect the price more - just explain why it appears there is a land shortage around the fringes of Sydney (according I believe to your earlier post, as a result of NSW government policy), yet the price of houses in these areas has been falling for the past 2 years or so?

Mercurius, you are obviously a coward, with a low opinion of women.
You don't believe women will be able to judge your post as humor.
Then you are afraid of the response of those women, even when they don't know who you are.

It's astonishing that so many in this discussion are attempting to deny the basic law of supply and demand.

Obviously increasing the number of buyers when land is limited will increase the cost of housing as has occurred, with such disastrous consequences, for so many ordinary Australians in the previous three or so decades. Property speculators make little secret of this fact.

Indeed on an edition of Radio National's "Australia Talks Back" in May 2004 to discuss the woes of the property investment 'industry', whose expectations of endlessly escalating housing prices had, at the time, been brought to a temporary halt, an economist, representing property speculators repeatedly expressed his hope that the anticipated resumption of high immigration levels would start housing inflation once more.

This has since happened with immigration numbers being increased to unprecedented levels of over 140,000 per annum, which is twice the historical average and the still more disastrous results are there for everyone to see.

The link between immigration and housing inflation was irrefutably established in a submission by Sheila Newman, then Victorian branch President of Sustainable Population Australia (http://www.population.org.au) to the Victorian Government Housing Affordability Inquiry in 2003. It can be downloaded as a pdf file (size 1.58MB) from here :

http://www.candobetter.org/sheila/spaVicAffordableHousingEnquirySub153.pdf

Perhaps housing affordability has something to do with the mansions we now expect to live in? My guess is that if we used measures such as what people fifty years ago thought was adequate housing (I remember living in a small country town in an eight square weatherboard house with a fireplace as the only heating and with no hot water) then housing affordability would not be an issue

Oh dear. Hasbeen, the <humour> tags were there for the benefit of the humour-challenged of any gender.

I see that in your case, they were still not enough. When did you have your humourectomy? Hope you recover soon.

As for being a coward, I post under my real name and I stand by the comments I make. And I've had enough mud hurled my way, so I know what to expect on OLO.

And I honestly had no thoughts at all about how "women" would react, although I guess I had assumed they would react the same way as men - as individuals, not as a group - perhaps you think otherwise.

Regardless, I can see that humour is wasted on OLO, where everybody considers their opinions far too important to make light of. Oh well, I'll go back to being grim and dour since that's what counts for a "serious" opinion around here.

Its good to see everyone is an expert on the topic...

I shutter to think if some of you guys pulled the economic strings.....

Howard's owings to big business.

"Mr Howard said urban sprawl, which in many Australian capitals already exceeded more than 100km, may be a price the nation had to pay to solve the problem of unaffordable housing."

http://www.smh.com.au/news/National/Sprawl-the-trade-for-cheap-housing-PM/2006/08/30/1156816942802.html

Comment:

The way he lies blatantly about his immigration funnel into SYDSEQ at the behest of a few financial barons is absolutely PHENOMENAL.

Has panic set in?

Howard couldn't lie straight in bed of a night. This isn't about Australian capitals. Its about Sydney and SE Qld. This isn't about young Australians househunting. Its about more migrants to fill shopping malls, tollways and media registrations..

Its about a debt Howard owes to property barons, infrastructure barons and Media Barons. Well, there are only three of them and 12 million people in NSW and SE Qld paying for Howard's price to them while he steals our GST, steals our right to quiet enjoyment, kicks us in the workplace and kicks us in our unis and colleges.

Its about an unsustainable migration program that Howard knows will fall flat if newby migrants are denied cheap access to the mono- supremo popular SYDSEQ. Popular because locals have been debased, overcrowded and biodiesel-meningococcolled and are considered worldwide as pushovers.

NSW and SEQ have had enough and we won't take any more!

STOP RELEASING LAND IN SYDNEY AND SEQ AND SHOW THIS PIMP WHOSE THE BOSS>

Then his 140,000 migrants per year (and their bloody cars) will have to go to the other capital cities. Big business will have to adapt. If they don't like adapting they can pull the plug on Howard and help us boot him out.

The more Howard bucks the will of the NSW people in particular with his propaganda and heinous migration tactics, the harder he is going to fall. Fall to the cheers of 8 million New South Welshman next election, November 2007.

Looks like Westfields might have spat the dummy!

Andrew

“As you know I support Australia having a higher population level than you do. I believe this level of population can be sustainable”

Yes I know…and it befuddles me completely.

At the risk of going over old ground….

It might be possible to have a larger population that is sustainable, but it currently looks highly unlikely. Why on earth wouldn’t we address the issue of continuous population growth (continuously increasing demand for all sorts of stressed and yet-to-be-stressed resources) with as much fervour as we are (or should be) addressing all the other stuff (alternative energy sources, better efficiencies, lowering per-person consumption, etc)? It is completely nonsensical to just let one huge aspect go unchecked, especially when it has the power to cancel out the gains made in all other areas put together. And why on earth would you want Australia to have a larger population anyway, especially one that is continually growing with no end in sight?

It just makes no sense at all. And it profoundly affects the way you think about all sorts of issues Andrew…. because with the acceptance of continuous growth you cannot possibly be striving for real sustainability, no matter what you may say or believe.

But you are not alone. I have made this point on numerous threads, pertaining to many well-meaning article-writers.

“If in doing so, serious constraints emerged as a direct consequence of the projected population level…”

Don’t you think serious constraints HAVE emerged? It makes me wonder what you mean by ‘serious’!

One serious symptom of population growth is the continuous rapid release of land, despite apparent rationing by many councils…. and the push for these councils to free up their approval process thus risking letting urban sprawl and population growth get out of whack with infrastructure and service provision, leading to a lower quality of life for the whole community.

Federal government policies to bolster the housing sector have distorted the operation of a free market economy with resources rushing into the housing sector to receive favourable tax treatment.

Specifically these actions were

1. the new home owners grant started in 2000.

2. continuation of negative gearing on investment properties

3. reduction of capital gains tax on investment property held for more than 12 months

Demographers have shown that migration increases demand for housing and most migrants gravitate to Sydney or Melbourne where unemployment rates are highest.

Foundation

Continuously high demand very directly affects urban land values or land and house packages, because it applies pressure on councils in growth-pressure areas to constantly approve new subdivisions.

Of course, councils are reluctant to do this without a whole lot of careful planning - considering the loss of agricultural land or bushland, providing infrastructure and services and considering the increased pressure on infrastructure and services in the greater community, considering effects on overall quality-of-life factors for the whole community and the increased pressure on the regional environment. Even the most pro-growth and real-estate-friendly councils have to consider at least some of these things very carefully. Hence their careful approval processes and reluctance to open up more land at a rate sufficient to keep prices down.

I would also say that in some instances councils are inclined to retard approval processes in order to increase land values, which both benefits their real-estate buddies and themselves by way of higher per-capita rates and it may slow growth to some extent thus reducing all the extra things that a council has to worry about that go with that growth.

Whatever the case, the simple fact is that a strong demand requires an abundant supply. The abundant supply is very understandably mitigated somewhat while the demand is not directly. If it follows that increasing the supply of land will lower prices, it must also follow that decreasing that demand will do the same. And therein is the main connection between our rapid population growth and high prices. And a very strong connection it is too.

Foundation, I am not just talking about immigration here. Our birthrate, interstate transmigration and seachange movement are also large aspects of this population growth issue, from national to local levels.

Unfortunately you have flipped off into loopy la la land far too early in this debate, well before you fully understand my viewpoint (in reference to your bizarre canetoad carry-on)!!

Supply & demand
Supply & demand
Supply & demand

Enviromentalism for the sake of enviromentalism is starting to cost big time .

Capital gains tax should be called envy tax as that’s all it is .

Who really pays capital gains/envy tax anyway ?
The seller ? Get real .
The buyer pays cgt as the seller has already factored in cgt liability if applicable in the minimum price that will be accepted for the property .
This means that the buyer will not only pay the initial cgt liability but will continue to pay for it through mortgage interest .
Or if the property is rented out the tenant will pay that cgt cost as part of their rent .
Capital gains/envy tax along with all other arbitary fees will always be passed on to the consumer .

Ludwig your heart’s in the right place friend & I recon we’d agree on a great many things including the poorly planned population growth thing , But mate try to have faith in the power of mother nature to sort out imbalance , You’ll get an ulcer . Were all only bacteria anyway .

STOP RELEASING LAND IN SYDNEY AND SEQ AND SHOW Howard WHO'S THE BOSS>>

Limits on Supply and demand:

Confucius say: Man who demand virgin open legs and take supply are rapist.

Making available ever larger areas of land to be largely denuded of trees, as is now happening at Berrinba wetlands in Logan Shire, south of Brisbane and as will soon be threatened to the Minnippi parklands within Brisbane is not a sustainable solution to the housing affordability crisis.

Those political leaders in Queensland, who deliberately increased the population by 1,000,000 in the last 15 years, and then basked on the glory of this supposed 'achievement', never bothered to think of where the necessary resources to support the additional population would come from.

The most striking evidence of this is, of course, the current water crisis. Another problem that is not widely known, is that Morton Bay is disappearing as more and more silt, which is running off from the ever greater areas of land under development, is deposited there.

Now they plan to increase the population by yet another 1.25 million by 2026.

In an article entitled "Owning a slice of the action" in the Courier Mail on 23 June, it was predicted by the Real Estate Institute of Queensland that in the next 10 years alone, average house prices would increase from the $365,000, already unreachable for many to the stratospheric figure of $800,000. In order to allow people to pay for this, financial institutions are planning to extend housing mortgage repayment periods to 40 years, or even 50 years.

The vision that the REIQ had for SEQ, as further revealed in the article, further included:

" ... we will be living on smaller blocks as more people move to the southeast corner. ... The current water crisis will mean nature's drop will be rare, ensuring most houses will have minimal lawns and garden. ... A session in entertainment rooms will replace the smell of fresh air and a potter around in the vegie patch. Besides most workers won't be bothered about gardening at the end of a long day at the office."

(to be continued)

(continued from above)

No doubt the 'long day at the office' will be made necessary by the mortgage repayments.

Whilst the REIQ openly relishes this future, I would expect that the rest of us would be struck with horror.

Andrew, is this the sort of future you want for South East Queensland?

If not, please tell us why you believe that the REIQ are wrong and how you believe it can be avoided if the planned growth in the population of SEQ continues.

---

The other driver of housing unaffordability is, of course, as Andrew has correctly alluded to, the private property market. The Housing Trust of South Australia, which for decades provided all strata of South Australian society decent affordable housing for decades, never cost South Australian taxpayers a cent.

In spite of the obvious success of this and other public housing programs, they have been wound back, and the consequences are indisputable.

It strikes me as quite odd that many people on this forum who express resentment at paying taxes to support people on social welfare, evidently, have no objection to themselves and the rest of us paying far more to support the lifestyles of a sector of society that the experience of the HTSA has shown, we could get by quite well without.

Jamo, I’m not sure what you mean by; “Enviromentalism for the sake of enviromentalism is starting to cost big time”

I have total faith in the power of mother nature to straighten us out, but not before she gives us a huge boot up the arse.

In fact as far as the planet goes, I don’t have any real concerns, coz we is just part of nature in the broad sense. The release of locked-up carbon will mean extinctions and other sorts of upheaval, but that’ll be followed by a new and dynamic phase of evolution….just as has happened many times before throughout the history of life on earth. I don’t think mother nature likes boring old balanced systems for too long. She seems to relish injecting a bit of excitement into the whole deal every so often.

But what thoroughly irks me though is our collective inability to look after our own future, despite the heightened awareness of all the factors that are bearing down on us. I especially hate the denial syndrome that our population growth is even a factor!! !! !! !! !!

This business did really get to me a few years ago. But I reckon I’ve found the balance between having an input into these issues without letting it reduce my quality of life. I’m not really some stressed-out old stodge. More of an athletic stodge into daily running, cycling, healthy food and a lot of tripping around the countryside indulging in my passions of plants, birds and rocks!

--
KAEP

Yes let’s stop releasing land in Sydney and SEQ, and other places.

But not just overnight. Let’s plan for limits to growth, within local state and national planning processes, and then gradually wind down land releases until we reach those limits…. and wind immigration back to at least net zero over the next few years and tell Costello where to stick his baby bonus.

NSW economy a brake on Australia's prosperity: PM

http://www.smh.com.au/news/National/NSW-economy-a-brake-on-prosperity-PM/2006/08/31/1156817038230.html

Comment:

New South Wales is losing $3billion of its GST to Howard and WE are killing the economy? I don't think so! And the main reason our economic indicators are down is because of drought. That drought is substantially caused by overpopulation of Sydney with resultant humungous pollution plumes off the NSW coast. These plumes have an associated micro climate which attracts atmospheric heat along with moisture and precious topsoils from the NSW heartland.

Howard is thus beating us with his immigration stick under the young Australian house hunter tissue of lies and softly killing us with drought into the bargain.

John Howard has got it in for us. Why does he HATE NSW so much?

But more importantly, what are we going to do about it in November 2007?

NSW Oi Oi Oi!

The present-day concern about "Housing Affordability" is predicated on a 3 b.r. brick-veneer house on a quarter-acre block; at the outer edge of the suburban sprawl - with all that implies. Taking on a heavy mortgage, and its servicing; imposes a life of petit-bourgeois semi- poverty. This is not an attractive proposition for the upcoming generation. It doesn't have to be like that.

Communications, technology and twenty-first century awareness offer choices other than those hangovers from the Industrial Age.
Intentional Communities recieve education, grants and incentives for putting Life back into the country. It is within this context that cooperating communities can provide houses that are economical, energy-efficient and aesthetically pleasing (together with room for a pony) at a fraction of the cost of a house in the suburbs.
gulliver

All this bulldust about housing affordability.”moral bankruptcy and buck passing blah blah” the usual diatribe of demands for intervention in peoples right to choose what housing they will seek. It oozes paternalistic hog-wash and is a call for the socialization of the national housing stock. All political bluff and if ever adopted, disastrous blunder.

Let us look at the history of housing lending, one of the most significant influences on housing prices. In the 1960’s and 1970’s house lending was controlled by a banking sector who blessed those who it thought could pay the loan back – on what basis – repayments of about 30% of their annual income, which meant, because interest rates were around 12%, 3 times annual income.

What happened in the 1990s and currently, the house lending business was, with the rest of banking, deregulated, the cold war ended and the prevailing economic environment stabilized to allow the inherent “risks” of lending to recede across all activities and the globe, making a lowering shift in interest rates inevitable.

What happens when interest rates fall? Repayments at 30% annual income remain but with interest rates at 6%, half what they were in the 1970’s the “affordable” house loan doubled (5 – 6 times annual income) and all other things remaining equal the demand side of the market, able to afford to pay a lot more for housing than before combined with state government land hoarding and you have the recipe for the housing price surge, as we have seen.

Another point with all this, in the 1970s with higher interest rates and out of control socialist spending, inflation was rampant and annual wage increases significantly higher than they are today. The “affordability” of a housing loan borrowed in one year could well be considered to be 20% cheaper in 2 to 3 years simply through wage inflation effects.

Entering the housing market is always tough in one's first year and easier in each subsequent year. It was as tough in 1970, as it is today

“The present-day concern about "Housing Affordability" is predicated on a 3 b.r. brick-veneer house on a quarter-acre block; at the outer edge of the suburban sprawl - with all that implies.”

Largely true Gulliver.

It drives other things as well, such as increases in unit occupation as well increases in their prices, and relative increases in building of this sort of residence with a resultant increase in urban consolidation, which has positives and negatives.

It also drives up rent as well as the portion of people renting.

But it doesn’t really drive the building of more environmentally-friendly homes, because it is the price of land rather than the dwelling that is really the issue.

It does drive an increase in people moving to places with lower property values, which again is good and bad. As far as I am concerned, this is largely bad, when it means an increased influx into smaller centres such as Cairns, Mackay, Busselton or Broome – centres which can do without that increased growth rate, and which will suffer even moreso than the equivalent amount of growth in the large cities.

The current highly inflated prices are leading to a vast regime of the semi-impoverished, who are likely to become the critically impoverished as fuel prices rise… and it is leading to a real estate elite class, which is likely to be able to survive quite happily through the coming resource crisis. In short, it is strongly promulgating a schism between rich and unrich. This is going to a very dangerous flashpoint, just a various other differences between groups in our society are, as things get tighter.

There must surely be a major imperative for governments to take strong action to reduce prices and even up this wealth gap…. and of course to strongly mitigate the demand for housing… and to NOT significantly free up land releases.

I agree with you wholeheartedly, Ludwig.

Col Rouge wrote: "Entering the housing market ... was as tough in 1970, as it is today".

Col, all the evidence I am aware of, and my own personal experience, tells me that the cost of housing has gone well beyond what even middle class people can afford, certainly if we are talking about detached houses with a decent sized front yard and back yard which was the norm back in the 1970's.

In 2003 the Commonwealth Bank and the AMP produced reports purportedly showing that housing affordability was good. However, Victorian Government economist Alun Breward subjected these claims to the microscope on a talk on "Ockham's Razor" (see http://www.abc.net.au/rn/science/ockham/stories/s1335462.htm) and showed that a number of fiddles were employed by the authors of the report. These included:

1. Ignoring of the trend to have periods of loans extended. (and there is now talk of having loan repayment periods to extended to 40 or even 50 years, as compared this to 20 years which was the norm in the 1970's)
2. Calculation of affordability of the price of a median house with reference to a mean measure of income.
3. Shifting of the focus of their assessment towards more prosperous Australians, that is, those who are buying their second or third homes.
4. Ignoring the fact that many of today's mortgages are being paid for with two incomes, rather than one as was the case a generation ago.

Housing costs, in terms of the number of years of income it takes to pay the price of the average house, has risen to the stratosphere. As a consequence, a far more wealth than ever before is being taken out of our pockets and put into the pockets of those in the massively bloated private property sector and associated upstream and downstream industries.

The example, which I referred to above (http://forum.onlineopinion.com.au/thread.asp?article=4834#53621), of the Housing Trust of South Australia, which never cost taxpayers a cent, is striking proof that we would all be paying considerably less for good quality housing if the housing stock had remained 'socialized'.

Foundation and Mecurius,

Methinks you two are HIA moles.

It is a standard response by developers to claim that anyone who raises population growth as an issue is zenophobic.

Sorry mates, no one is sucked in by this empty argument anymore.

Is a zenophobe scared of buddhists?

:-P

I think the HIA and myself have very different ideals... They would probably hate to see house prices collapse by 30-50% across the entire nation.

Can you actually dispute my claim using hard statistical evidence?

I'll repeat, there is no statistically significant correlation between the RATE of population increase and the RATE of house price increases.

And if you seriously believe that it is an excess of population over dwellings that has caused the current affordability crisis, should you not be blaming the declining size of households rather than population increase? After all, our current rate of roughly 170k new dwellings per year (down from 210k pa at the peak of the housing boom) should adequately house the population increase of what, 240 thousand per year. No?

Excessive credit creation and lending, with lax standards, enabled this boom. Government policies (FHOG, neg-gearing, CGT discounts and avoidance (reno & flip the PPOR; rinse repeat, the 6-year rule etc?)) encouraged it. The media were payed to promote it, and the public reacted stupidly, naively and with the kind of irrational hysteria described in "Extraordinary Popular Delusions & the Madness of Crowds".

f

daggett, I know this is digging over old ground, but there still seems to be a view that affordability is some kind of absolute measure.

>>all the evidence I am aware of, and my own personal experience, tells me that the cost of housing has gone well beyond what even middle class people can afford<<

If that is the case, who is buying?

"All the evidence" also suggests that sales of electronic equipment such as wide-screen TVs and home entertainment systems driven by PCs have never been higher.

"All the evidence" suggests that Australians continue to spend an increasing amount every year on overseas holidays.

"All the evidence" suggests that sales of SUVs (until recently halted by the price of fuel) have been steadily increasing.

Yet "somebody" still has the wherewithal to keep buying up these houses, despite the fact that they are "well beyond what even middle class people can afford"

It might just help us along if someone gave a working definition of "unaffordable".

>>As a consequence, a far more wealth than ever before is being taken out of our pockets and put into the pockets of those in the massively bloated private property sector and associated upstream and downstream industries.<<

A broad claim. Care to give it some dimensions? Are developers making more or less money than they did (say) in the 1960s? And who exactly are the "upstream and downstream industries"?

"If that is the case, who is buying?"
Those who owned a house before the boom and have 'withdrawn equity' (used it to secure further debt) to upgrade to bigger houses, buy holiday houses and investment properties.

Yes, as a whole, we are spending record amounts of money on electronic goods, holidays, 'SUV's etc. But by and large this is debt-funded rather than savings funded. How often have you heard somebody say "we finally took that trip to Europe after spending 10 years saving the $15,000 it cost us"? It doesn't happen. It's all put on plastic or MEW'd or put on plastic and then 'consolidated' later into personal or mortgage debt.

"It might just help us along if someone gave a working definition of "unaffordable"."

Unaffordable is when those who don't already own a house cannot afford to purchase one of decent standard without taking on crippling debt.

Alternatively,

A related Rational Pricing test would be – what proportion of home-owners could afford to purchase the house they currently occupy at current prices, assuming zero equity in other real-estate and only their savings as a deposit?

This index would be fascinating, and I believe currently at a staggering record low.

Foundation wrote (http://forum.onlineopinion.com.au/thread.asp?article=4834#54125): "I'll repeat, there is no statistically significant correlation between the RATE of population increase and the RATE of house price increases."

As I have already shown above (http://forum.onlineopinion.com.au/thread.asp?article=4834#53462), property speculators disagree.

On Pages 56-60, in her submission to the 2003 Victorian Government Housing Affordability Inquiry (http://www.candobetter.org/sheila/spaVicAffordableHousingEnquirySub153.pdf - 1.58MB), also referred to above, Sheila Newman quotes Steve Kropper, Vice-President for Strategy at Primedia, which owns http://realestate.com in regard to the US:

"I offer the following simple explanation of why I do not anticipate a fall in housing prices. It has to do with sex in foreign countries. If people keep having babies abroad (safe prediction) and they see America as the promised land, so long as our immigration flood gates remain open, then demographics, the fundamental driver behind US housing growth guarantee that prices will not fall."

"... And immigration provides demand side pressures that support housing growth and the current price levels. Population growth benefits the value of our homes, but devours open space and wills a more crowded America to the next generation. Our children will have to worry about disappearing cornfields in Fort Collins, golden hillsides in Vista, leveled woodlands in suburban DC and filled wetlands in Fort Meyers.

"As a key driver of housing growth, and price rises, immigrants and home prices are safe as there is no national plan or consensus to change our immigration policy. There is no likelihood that the gates will be closed on immigration, a key driver in housing demand."

On page 63, Newman demonstrates the correlation between population growth in different Australian states and property prices:

"Note that the prolonged flatness of prices in Melbourne coincided with outward interstate migration from Victoria to Queensland and other places (where prices rose). In these areas the property development industries took advantage of the relatively low land prices there to purchase land and resell it to builders and home buyers as the flight from Sydney's high prices produced new home buyers in Northern coastal NSW and Queensland."

This relationship was accepted in the final report from the Inquiry.

Sustainable Population Australia... no hidden agenda there then!

I'll give the report a thorough review tonight. At a glance though, it looks as though it might be more of a skewed literature review (as in presenting only literature supporting their predetermined argument) than robust, statistically supported analysis.

I'll also redo my correlation analysis using % change in:
1) house prices
2) population
3) interest rates
4) general price inflation
5) capital gains taxation
6) rental yields
7) wages
8) GDP
9) housing debt
10) housing stock
11) housing turnover

% change will be assessed over 1 year, 2 year, 5 year and 10 year intervals for the last 35 years. I'll report back my results.

As a general curiosity, if immigration is exceeding housing construction, and thus causing demand for houses that exceeds supply, thus causing high house prices and low affordability, why is it that only house prices appear to be affected, not rents? Do immigrants have a higher preference for house purchase than born citizens? If it can be shown that the exact same periods of ‘high immigration’ (relative to what?) quoted in the SPA submission coincided with falling rental yields, does this not shred their argument?

Foundation,

I await with eager anticipation the results of your "correlation analysis". I will be fascinated to see how you attempt to refute what I have shown to be common knowledge in property speculation circles and what I also would have thought was basic intuitive common sense.

I would also be fascinated to see how you attempt to disprove the graphs based on data obtained from the HIA and CBA on pages 7 and 8 of http://www.candobetter.org/sheila/spaVicAffordableHousingEnquirySub153.pdf.

Dagget, those graphs show only one indisputable fact - that inflation-adjusted house prices have risen less in rural areas than in cities. That is all! Are population growth and immigration THE ONLY other factors that differ between rural areas and cities?

If yes, you've proven your point. If no, there's a strong chance you're reading too much into the charts. I reiterate, concurrent population growth and house price inflation does not prove correlation. Furthermore, even correlation does not prove causality.

But you write "I would also be fascinated to see how you attempt to disprove the graphs..." What nonsense! I would think it is up to you to prove they demonstrate the effect you describe.

Here's a clue - gather every possible variable (not just the two that suit), then mathematically test the influence of each variable on the value of house prices, while holding all other variables constant. Change your constants. Repeat. Rotate variables. Repeat. Change constants....

That is science. Pointing to two lines, claiming they support your argument, then challenging others to "disprove them" is counter-constructive.

Intriguingly, I live in a small, rural, coastal town. In the last 5 years, average prices have risen from below $80,000 for a 3br house to $300,000. Far more in percentage terms than any capital city. Yet the only non-Australian-born residents I can think of have been here for decades. Funny, huh? You’ll find the same thing right around the rural coastline. Perhaps there should be a 3rd chart on that report…

Foundation you can't just extrapolate by just looking at your own small coastal town, which sounds delightful.

Sydney grows by 50,000 people each year, that is perhaps 10 times the population of your small coastal town. Each year people migrate to Sydney from rural NSW and other parts of Australia as well as from overseas. If you look at immigration figures from after 1945 you can see that state housing authorities had to build whole suburbs [and towns] to house the overseas migrants. Look at the housing around the car plants in Elizabeth, SA and Broadmeadows Vic and North Geelong Vic.

Daggett “Calculation of affordability of the price of a median house with reference to a mean measure of income.”

“Affordability”, in that context would need to assume “all other things remain equal”.

Let me assure you, all other things have not remained “Equal” consumer goods, whilst more abundant and diverse, have collapsed in price – price of TVs and video recorders in the 1970’s for instance, New Cars are cheaper than they ever have been.
Computers, on any power : price calculation are a tiny fraction of their 1970 price – example – 2 gigabyte (2,000 megabyte) memory stick costs $99 whereas a 200 megabyte harddrive (1/10 the capacity) in 1978 cost $200,000.

Having lived and bought property in the 1970’s and 1980’s my view remains the same, “affordability” is no different today than it was 30 years ago. It is no harder, today. The only thing that has changed is the expectation of more folk these days that the world “owes” them everything and thus lack the character and self discipline to budget, save or accept hand-me-down second hand furniture when it is offered.

Col,

Over a year ago shared with us that "I design and implement corporate financial forecasting models. The current price I charge for these is in excess of $25,000 each." (http://forum.onlineopinion.com.au/thread.asp?article=3737#13522) So you can hardly expect the rest of us to accept that you are a typical homebuyer and that your experience should be applicable to the rest of us. Indeed, I would be surprised if in your case housing was not a good deal more affordable for you today than it was in the 1970's.

You wrote: "The only thing that has changed is the expectation of more folk these days that the world 'owes' them everything ..." That describes very well in my view the mindset of property speculators and landlords. A few years ago, I reluctantly sat in on a negotiation over the purchase of an investment property. The real estate agent confided in us that because of the negative gearing laws that one out of every three properties bought by an investor was paid for by his tenants.

As I showed above (http://forum.onlineopinion.com.au/thread.asp?article=4834#53863) we once had a housing system which made it possible for nearly everyone to have affordable good quality housing and plenty of space. This was largely due to the fact that much housing was owned publicly and not privately.

This situation has been changed over the past few decades to what we have today due to the political influence of land speculators and property developers behind the scenes. As a consequence many of us have to become debt for much more for much longer. At least two incomes and longer working hours are now necessary to pay a typical mortgage.

Mal come and turned it to Bull . . . .- RBA interest rate rise

Comments made by a NSW Liberal politician from the seat of Wentworth, was reported to say that all Australians will be able to manage the latest rises in interest rates by the Reserve Bank of Australia.

His comments made also on the release of a high National statistic of Homeowners defaulting on mortgages and Banks reclaiming Australian family homes.

At least 70% of Australians remain average wage earners, whilst the remainder of 30% with above average wages, stack National figures with an assumption that affordability in increases of costs can be absorbed.

The average affordability of an Australian family to buy their own home has taken only six years of Liberal governing and policy to eliminate an Australian Ideology.

The government response to this is that renting is nothing to be ashamed about.

The safety net assurance by our Government that "Handouts" supplement the poor and low income households should be kept in the context of only providing the basic necessities and are only committed to maintaining a below the poverty line society.

This presumed reasoning by our Government continues to provide the smokescreen to the increasing divide between rich and poor, whilst other Government handouts are also enjoyed by high-income households who do not need them.

Foundation (http://forum.onlineopinion.com.au/thread.asp?article=4834#54331),

I am still waiting for you to 'report back' on the results of your 'correlation analysis' as you have promised (http://forum.onlineopinion.com.au/thread.asp?article=4834#54286).

Unless you somehow manage to prove to us that the housing hyper-inflation of recent years has been caused by factors other than the unprecedented immigration driven population increases, I think it would be prudent for us to assume that these are the cause, as common sense, the laws of supply and demand and the words of property speculators themselves strongly suggest.

I would further add that that the expected cramming of another 1.25 million into South East Queensland by 2026 would be the main reason why the REIQ anticipates, and welcomes, average house prices rocketing up from an already ridiculous $395,000 to $800,000 in ten years time (see above at http://forum.onlineopinion.com.au/thread.asp?article=4834#53620).

You wrote: "why is it that only house prices appear to be affected, not rents?"

What are you talking about? The Queensland papers are full of stories of a rental crisis which is caused by immigration into Queensland.

In May this year a neighbour, who lived in a unit next door, was forced to move out after investors had bought the units and jacked up her rent. In the months prior to the house being her life was turned into misery as real estate agents showed prospective buyer after prospective buyer through her home. As a consequence of her appalling treatment which I won't fully describe here, my already low opinion of real estate agents has plummeted further.

---

Pericles (http://forum.onlineopinion.com.au/thread.asp?article=4834#54158),

it should be obvious to anyone who cares to look that the city is overwhelmed with real estate agents and finance businesses geared to serving the property market. Why don't you take a look in your local shopping centre some time? It's impossible for me to walk the streets without tripping over real estate agents. My letterbox is overwhelmed with junk mail for real estate agents and I am constantly bothered by calls from real estate agents offering market opinions.

Where do you think that the money to pay for all this ultimately comes from?

Daggett – your digression into my past post would have been wonderfully illuminating and educational experience. I would agree that “I am not a typical anything”, I do not believe anyone is, we are all individuals with individual rights, individual skills and individual choices in what and where we should invest our individual savings, that is why I do what I do and you do whatever it is that you do.

All of that has nothing to do with affordability or my experience of it. As for your the simplistic description of what you term “negative gearing” and who pays for it, Tell me – who lives and has benefit and use of the property - the tenant – what would you see them live there for free? So tell us - who pays the other 2/3?

“At least two incomes and longer working hours are now necessary to pay a typical mortgage.” – that depends on what “priorities” you place on your resources, whether you upgrade your car every year, take expensive holidays or do what folk did in the past, which included DIY home projects, accepting second and furniture with thanks and “Balancing their personal budgets”.

Your arguments are shallow and predictable, try to use some imagination in future, I know I do and find it most rewarding (in a commercial sense).

Oh btw “Negative gearing” is nothing special, it allows the application of all expenses to be offset against the income, in exactly the same way as any other form of investment or trade. “Removing Negative Gearing” would require the enactment of “Special Rules” for one class of investment. Such actions would merely make the investment different to other opportunities, destabilize the market, see a withdraw of funds from rental housing and thus reduce the supply of property for rent, this would, since their would be no reduction in demand, effectively “Up” the price of rents for tenants

Dagget, I'm still testing and measuring correlations. However, early indications confirm my previous beliefs. Over short terms, 1 and 2 years, the 3 measures of population growth I'm considering are not significantly (p<0.05) correlated to house price growth. Over longer periods, I'll concede there is a correlation between both rate of natural population growth (3ymPOPn), rate of total population growth (3ymPOPt) and rate of house price inflation (3ymHPI). However, the rate of population growth from immigration (3ymPOPi) is still not significant. Nor do the other measures rank highly compared to variables such as CPI growth, wage growth etc. I'll detail full results, perhaps in a more appropriate forum when complete. Remember, correlation does not prove causality (remember the cane-toads).

Your 'evidence' of rental pressure is nothing more than anecdote. Other sources of rental pressure hyperbole are frequently published, most commonly from vested interests such as real estate 'institutes', primarily to promote confidence in the investor market. Hard facts do not back up such claims. Refer to ABS figures for true increases in rent - minimal over the last 6 years, generally below inflation. Beware of vacancy rate statistics also - they are dubiously sourced and frequently understated.

To attack your message (correct me if I'm wrong) - that population growth is the PRIMARY DRIVER of youse prices, and that the solution to unnaffordable housing is lower immigration. Demand exceeds supply.

Please explain (slowly) how this is compatible with:
- Melbourne median prices below 2003 levels despite considerable population growth?
- HPs rising 380% in 5 years despite zero immigration and low (<4%) population growth in my home town?
- New dwelling construction rates nationally of one to every 1.2 to 1.5 new persons?
- The smallest household size (persons per dwelling) ever in the history of Australia?
- Rental yields falling from 8% 1986-89 to 5% 1996-99 then 3% 2003-06?

cont...

...cont

Does it not seem that even if population growth has SOME effect, that another driver is stronger?

I'm expecting further houseprice adjustment of -30% relative to wages over the coming decade. This will be a combination of falling and stagnant prices and HPI below wage inflation. If I'm correct and REAL falls are widespread, will this prove you wrong? Or will it simply prove that our population is declining?

And finally, with housing debt set to grow by >$100 billion this year, while aggregate wages grow around $25b (a long-term unsustainable imbalance), is there just a slight chance that unsustainable debt accumulation (due to unrealistic expectations of capital gains exceeding borrowing costs over the long-term) is the real PRIMARY DRIVER of HPI?

And finally, to “Where do you think that the money to pay for all this ultimately comes from?” One word – DEBT.

Foundation,

Your argument is convolluted and unconvincing. You concede that there is a 'long term' correlation between population increases and housing inflation, but then engage in an exercise in hair-splitting, by attempting to distinguish between natural population increases and immigration derived population increases, on a basis which is unclear to me.

(If you want to spell out the argument in greater depth you could start your own free blog at http://www.blogspot.com, but, unfortunately, http://foundation.blogspot.com has been taken. Alternatively, you (and anyone else, for that matter) could post your thoughts here : http://www.candobetter.org/node/1, although, as a necessary precaution against spam, for example, I have to moderate contributions.)

Clearly other factors can serve to exacerbate or retard housing inflation, but the fact remains that higher demand will drive up the price of a commodity. This has clearly happened in Sydney, Perth and South East Queensland where population has increased by 1,000,000 in the last 15 years and is expected to increase by another 1.25 million by 2026.

Countries such as France, which have controlled population levels have not experienced the ravages of housing hyper-inflation as we are now in Australia. That is why developers and property speculators have formed lobby groups such as http://www.apop.com.au to lobby for high immigration.

If anyone wishes to look at the graphs I have referred to, without downloading the whole 1.58M submission (http://www.candobetter.org/sheila/spaVicAffordableHousingEnquirySub153.pdf), they can be found here:

http://www.candobetter.org/sheila/housingPriceRisesInCapitalCities.jpg
http://www.candobetter.org/sheila/housingPriceRisesInRegionalAreas.jpg
http://www.candobetter.org/sheila/housingPriceRisesInFrance.jpg

I also note that you have not addressed the question of environmental degaradation and the decline in quality of life that I raised in my earlier post. In theory, if we build enough houses and keep the property speculators from appropriating too much of the profits, we could, in theory make housing affordable, for a growing population, but in Sout East Queensland, we would probably still lose Morton Bay which is being flooded with silt which has run off from property developments.

Col Rouge(http://forum.onlineopinion.com.au/thread.asp?article=4834#54617),

It seems that we can predict that we you will resort to personal attacks when you sense that you are losing the argument.

Regarding negative gearing: to me it seems unfair that people paying off their own homes are not allowed to negatively gear whilst people, who buy homes that other people need to live in, are.

I think an easy distinction can be made between property investment and other forms of investment. The former is completely unproductive and achieves nothing other than to exploitatively facilitate the transfer of wealth from one section of society to another. If this form of investment were discouraged, it seems likely that more more would be invested in enterprises that are likely to be more beneficial to the economy and to the community as a whole.

It seems inituitive that abolishing negative gearing would make the purchase of houses cheaper for people intending to actually live in them. If it turns out, as you predict, that abolishing negative gearing were to cause a shortage of rental property, then we should simply expand the stock of public housing.

As I have already demonstrated above, public housing is far cheaper than private housing, partly because the enormous costs of supporting many tens of thousands of real estate agents, landlords, conveyancers, mortgage brokers, bankers, property speculators, advertisers, etc, are not required. The most striking example was the Housing Trust of South Australia which provided good quality housing for South Australians for many decades without costing taxpayers a cent.

Daggett “Regarding negative gearing: to me it seems unfair that people paying off their own homes are not allowed to negatively gear whilst people, who buy homes that other people need to live in, are.”

Following such reasoning would presume that every family car should be as depreciable as a vehicle purchased exclusively for business purposes

or

the food we eat is as qualified a tax deduction as the food purchased for resale by (say) a deli or restaurant.

Your point is not really about negative gearing at all but about “tax deductibility”.

The Australian Tax system, like all “tax systems”, distinguishes between purchases and expenses made in the pursuit of gain (investments), separate to purchase and expenses incurred for personal consumption.

Thus -
A business using, say, a plumber, to fix a water system in its building can claim back the GST and the tax deduction it incurs on its repair costs, whilst a personal individual having their water system repaired by the same plumber could not.

Stamp duty paid on the purchase of an investment property is a deductible expense whilst the stamp duty of an owner occupied property is not.

Oh and on the flip side, an owner occupied property is exempt Capital Gains Tax, an Investment property will, possibly, incur CGT on disposal.

If you want to argue the “fairness” of negative gearing, you need to understand the basis which creates it.

“It seems inituitive that abolishing negative gearing would make the purchase of houses cheaper”

Something wrong with your intuition if you believe that, remove buyers from the market and prices will fall – but at the expense first of available rental properties and thus increase tenants rental charges.

“Public Housing” might seem cheaper but a lot of people are intent on paying the premium not to live in the inevitable squalor which chronically besets public housing estates.

I guess “Public Housing” is fine, unless you actually have to live there.

And as for your "hissing fit". If you thought that was a “personal attack”, you obviously do not know me.

daggett, one small question.

Why France?

I downloaded the SPA report that you seem to put such confidence in, and read as much of it as I could without causing damage to the furniture in my office.

Nowhere in the report could I find one single credible justification for the comparison of our housing market and that of France.

They have 60 million people in a land mass of half a million square kilometers, we have 20 million in 7.6million square kilometers.

And the very thought of comparing Paris and Sydney is mind-blowing.

Have you ever been there? Has the author of the report ever been there?

It is a nonsense, pure and simple. Laughable.

If this is your standard of evidence, I'm sorry, but I just cannot take you seriously.

Ms Newman also compares a number of other countries.
Regarding France, some reasons of many are:
Housing in France (and much of Western continental Europe) is very affordable in comparison to Australia's.
France started out with similar policies of population building to Australia's after WW2 but dropped them in 1973 after the first oil shock.
Australia started out with similar housing policies to France's after WW2 but dropped them with the ascent of Menzies, when it privatized most housing, simultaneously starting to import many immigrants, on which the housing industry came to depend. But France did not privatise and so, although it continued to import population for some time, the housing industry was not reliant on this.

Historical similarities and later differences in policy and outcome provide good contrast.

France and Australia have good demographic statistics back to the French Revolution (1789) and in Australia to 1788. Both have good documentation of their housing starts. But Australia's housing industry is full of booms and busts, whereas France had its first boom only in the mid 1990s.

Australia’s problems are in its land-tenure system. France’s strengths in hers.

Pericles’ comment re the difference between the total populations and land areas seems pointless.

France and Australia have both grown by a similar number of people since 1945 but in Australia's case this represented two thirds of its population and in France's case, about one sixth. Good compare/contrast.

Why is the thought of comparing Paris and Sydney mind-blowing?

The author, a fluent French speaker, went to France (Paris, Dijon and Mers-les-Bains) four times during the five years of research, which was supervised by a French Professor of Contemporary French History & Demography. She liaised with INED, INSEE and interviewed housing professionals, politicians and authors.

Sounds like Pericles, unable to come up with specific criticism, is blustering to cover the fact that the material presented by S.Newman is so far beyond the usual fudge that passes for research in housing that he is totally out of his depth.

If this is Pericles’ standard of critical review, then Ms Newman has little to fear.

Col Rouge’s defense of land-speculation is unconvincing. Public housing need not be low standard. It should be designed as it once was, to cut the costs to worker and employer and to put them close together through good planning. Unfortunately Australia has lost its way in this.

If Australia had good low cost public development for both public and private housing then this would put Australia in a much better situation to compete economically with countries which do not have to subtract our land-costs from their business profits. At the moment the only way many businesses can find a profit margin is to chisel workers. High housing/land costs in Australia are the main reason that we have a huge foreign debt and have great difficulty competing on the world market with our goods and produce.

Kanga wrote "The author, a fluent French speaker, went to France (Paris, Dijon and Mers-les-Bains) four times during the five years of research, which was supervised by a French Professor of Contemporary French History & Demography. She liaised with INED, INSEE and interviewed housing professionals, politicians and authors."

That seems to be an awful lot of trouble to go to just to arrive at what appears to be a predetermined conclusion, backed up with conjecture (and those fancy, but meaningless, charts) rather than factual evidence. But I wasn't driven to destruction as was Pericles, as it gave me many hearty (and stress-relieving) belly-laughs.

Dagget, I notice you ignored my questions. Now that further evidence is emerging of negative house price pressures, I wonder how long it will be until falling national median prices prove (according to your theory) that our population is in decline...

Back to those charts again, it is worth noting that the bulk of the boom in rural areas occurred AFTER the city boom and AFTER 2002 when he charts were created. Take Victoria, the VGRs office reported median rural values rose by 20% in 2003 as Melbourne’s boom was petering out. In 2004 and 2005, rural prices rose by over 10% pa. I would suggest that if those charts were updated with the last 4 years worth of data, they would look rather different. Incidentally, France had house price inflation of 14.5% in 2004, and 12.9% in 2003 according to The Economist.

Regarding France, they have property taxes, rent controls, right to housing, tax on vacant second homes, the landlords charter, a low, flexible and individualised personal taxation regime, lease tenure security and right of pre-emption on sale, wealth tax, succession tax, quarantined mortgage interest tax deductibility…

Not quite apples and apples. Still, if somebody would just pay me to travel around the world 4 times to conduct further research… ?

Foundation(http://forum.onlineopinion.com.au/thread.asp?article=4834#54912),

You have ignored the 'larger picture' evidence in my posts whilst criticising me because I haven't, in the space and time available to me, attempted to conclusively refute some of your arguments over what appear to me to be relatively minor aspects of the issue(http://forum.onlineopinion.com.au/thread.asp?article=4834#54677).

I have acknowledged, that other factors can either add to, or detract from, overall housing inflation. At times speculative investment, particularly when fueled from overseas sources, can cause housing prices to climb higher than what they should be if supply and demand criteria were strictly applied.

I believe this happened in Melbourne prior to the year 2003 to which you are referring. A lot of high rise apartments were built for investors who were prepared to commit themselves to buying those apartments, for what they were led to believe were good prices, by paying deposits. In fact, I knew someone in Sydney who had paid a $50,000 deposit. In 2004, as a result of a massive oversupply the market value of the apartments was considerably less than what he had agreed to pay and he was considering forgoing his $50,000 deposit altogether.

The fall in median prices in Melbourne would most likely also have been influenced by interstate migration to both West Australia and Queensland, where prices have clearly risen.

Regarding your own home town, surely you should be able to appreciate that, in the case of a small town it would not be necessary for large numbers of people to physically move there in order for the market value of housing there to increase?

Regarding rental yields, if rents had risen directly in proportion to the outrageous increases in housing costs over recent years, that is if they had remained at 8%, instead of having dropped to 3%, then clearly many more Australians would now be living in abject poverty. As it is, even with these lower proportional yields, rent increases have made housing unaffordable for many where it previously had been. This includes my neighbour who could not afford the rent increases after her unit was sold to new owners ... (toBeContinued)

(continuedFromAbove) ... and the Queensland newspapers are full of similar stories.

I don't have time to address all of your other points. If you can to prove that increasing population, and hence demand, does not increase the cost of housing then I, and a lot of economists, not to mention property speculators, would be amazed.

Perhaps, in theory, we could provide affordable housing for a significantly larger population, but only at the expense of our environment, our quality of life and of our long term sustainability as I have shown above.

--

Col(http://forum.onlineopinion.com.au/thread.asp?article=4834#54617),

firstly, I don't particularly care whether or not you engage in personal attacks. If you choose to do so, then I would expect that it would only serve to diminish yourself in the eyes of most other site visitors.

Please stop wasting our time by insisting that housing is as affordable now as it was back in the 1970's. The Age on 26 August reported (http://www.theage.com.au/articles/2005/08/25/1124562981839.html?from=top5) that Australia has the least affordable housing in the whole world. It can only possibly be more affordable now to people like yourself who "design and implement corporate financial forecasting models" costing "in excess of $25,000 each" and have more business than you can handle(http://forum.onlineopinion.com.au/thread.asp?article=3737#13522).

The difference between you and most of the rest of us is that we see affordable housing as a basic human right and you do not. This was once a principle that guided Government policy, but the private property lobby managed to change that, implicitly, and dishonestly, promising that they could do it more cheaply than the Government, and we are now paying the terrible cost.

Where there is a political will, governments can provide decent affordable housing at costs much less than what can be provided by the private sector. This has been shown by the example of the HTSA as I have shown above (http://forum.onlineopinion.com.au/thread.asp?article=4834#54828) and by European countries such as France. I would also add that for a few years when I was growing up in the 1970's, I lived in a perfectly good house owned by the Queensland Housing Commission.

Newman critically used statistics of total immigration including interstate immigration in her graphs, rather than unrepresentative categories that understate total movement and are affected by lags.

S. Newman’s charts, which Foundation calls “those fancy, but meaningless, charts” seem identical to the charts that the Productivity Commission accepted as showing that Immigration was definitely a factor in housing prices.

S. Newman made another superb original contribution to the debate by showing how the immigration factor was massively amplified by growing use of the Internet by coalitions of private migration agents, realtors, solicitors, and universities touting for students over the period when, as Foundation notes, the “bulk of the boom in rural areas occurred AFTER the city boom and AFTER 2002”.

Newman also gives a history of the National Foreign Investment Review Board’s increasing promotion of globalisation of the Australian real-estate market and finance (foreign debt) in policy and law from 1975.

Newman would be perhaps the ONLY independent commentator in the field, not deriving profit or salary from the field and her research entirely self-financed, so comments about payment for travel could be defamatory. All invited submissions and consultants in the Enquiry were professionals representing vested interest in increasing profits in the materials supply, financing and property development industries. Pertinently, K. Betts, co-editor of Monash University’s People and Place, has written about how Australian research conclusions that fail to support population growth do not get academic or funding support.

Housing policy became an interest to Newman because housing starts were an indicator of major energy use and the capacity of governments to control it.

Newman’s original study contained not one, but three literature reviews: ecology & energy; land-use planning and housing systems; and immigration & population. Her sources and references greatly exceed and outweigh those used by other Australian commentators I have read and derive from original sources and comparative literature in two languages. One of six appendices analysed in detail ALL the statistical sources and data in terms of reliability, comparability, and what they actually measured rather than what they claimed to measure. These appendices are available at Swinburne Univ.

Kanga, a stout defence of a poor document, but marks for trying only.

The "reasons" you provide (for comparing Australia with France) are very flimsy.

>>Housing in France (and much of Western continental Europe) is very affordable in comparison to Australia's<<

Many other countries can also claim this attribute. Why pick on France?

>>France started out with similar policies of population building to Australia's after WW2<<

This is one of many, many unsubstantiated assertions that are used to bolster Ms Newman's case. Looking closely at the supporting sources, what do we find?

>>This submission uses as an important source, S. Newman, The Growth Lobby and its Absence... a research thesis which compares population policy and demographic outcomes in France and Australia from 1945<<

The bulk of the footnotes refer to the same document, leaving the cynical to consider the possibility that the sources quoted are somewhat selective.

>>Australia’s problems are in its land-tenure system. France’s strengths in hers<<

Stated, but not supported with evidence.

>>the difference between the total populations and land areas seems pointless<<

Er... sorry? Population density is not a variable to be taken into account? Since when?

>>France and Australia have both grown by a similar number of people since 1945 but in Australia's case this represented two thirds of its population and in France's case, about one sixth. Good compare/contrast.<<

A "good" comparison? No consideration of the differences inherent in more than doubling in size, as opposed to a modest twenty percent growth spread over fifty years?

>>The author, a fluent French speaker, went to France (Paris, Dijon and Mers-les-Bains) four times during the five years<<

All is explained - it was a prolonged boondoggle on other people's money. France was chosen as a holiday destination, not as a valid comparator. That fits nicely with the extended use of the previous "thesis", which also focuses on France for no particular reason.

Makes sense to me. Nice work if you can get it, but please don't try to pass it off as serious research.

Kanga, "the material presented by S.Newman is so far beyond the usual fudge that passes for research in housing"
Sigh. No, it is utter rubbish. Fudge would be sweet compared to this. Some examples:

P6. "European countries [...] since the oil shock, have adapted to a declining population growth rate. "
Australia has also been in a general downward trend since 'the oil shock'. Net migration (as a proportion of total population) has also declined over this period.

P34. "As noted above, the rate of population growth, especially immigration, and the location with respect to physical ammenity, both built and natural, and to social ammenity of various kinds, in different regions affects prices."
That's all. No well-reasoned arguments, no supporting evidence, just a broad statement "rate of population growth, especially immigration". Why? Those charts? Some weird thing called 'ammenity'?

P34. "A new bubble has begun however and this will also hopefully return to base or near base - depending on surrounding global inflation and as long as laws and policies remain the same."

"This will also hopefully return to base". Why? Because otherwise it will not be supportive of the theory? Seriously, why else? A researcher should be a passive observer. This sentence demonstrates an emotional investment - perhaps bias.

The latest Economist has a table showing house prices in France up 120% (1997-2006) vs 126% here. Net migration over the last 5 years averaged 0.66 per 1000 per year in France, versus our current 7.1 per 1000. Wage growth has been stronger here, so deflating these 10 year gains by wage inflation puts France ahead in the HPI race. Time to lay this to rest yet?

P37. "1962 was actually the year of a one-off massive increase in population in France. The population increased by almost a million immigrants [...], instead of numbers between 150,000 and 200,000 immigrants [...]. It is remarkable that prices did flatten out for such a long period."

A massive increase in immigration immediately preceded a period of 'flat prices' in France!?

P59. (reference)"Although there is a correlation, this does not prove causation [...] The Wrap Up - Immigration=Demand "

No, the variables from this selective example of 8 states and one country ARE NOT SIGNIFICANTLY CORRELATED! They return a Pearsons correlation coefficient of -0.19, but the significance indicator is at p=0.62! Generally values less than 0.05 are considered significant, indicating the correlation is less than 5% likely to be coincidental. A value>0.5 renders any perceived relationship meaningless.

P63. "Despite the apparently 'flat period' for prices, they actually never really dropped after 1987. It is this phenomena that I call 'Australia's ratcheting effect'."
It's what economists call 'inflation'. The misperception is what economists call 'wealth illusion'. Refer back to those charts which, being real indices, show that prices actually really dropped after 1987. In Melbourne and Sydney, they were below peak for 10 years.

P76. "The data I have presented on prices, housing starts, and immigration does not absolutely quantify an answer to the question.."
No, they don't even address the question.

P83. "… the practices of property seminar providers marketing real estate which have recently obtained so much public criticism are only a very public aspect of an industry which routinely influences government and our immigration program in order to promote a growing customer base and inflation of land prices."

Where’s the link? How does the promotion of real estate influence government policy on immigration? I’d understand it encouraging speculative investment, driving up house prices, but… what? Hilarious!

- - - - - -

As for Olduvai's "comments about payment for travel could be defamatory", I clearly asked for payment (intended lightly) so that _I_ could conduct equivalent research on the issue. I didn't intend to imply that she had travelled free. I wouldn't know, nor care.

Pericles wrote, "The bulk of the footnotes refer to the same document, leaving the cynical to consider the possibility that the sources quoted are somewhat selective."(http://forum.onlineopinion.com.au/thread.asp?article=4834#54974)

The document referenced in the submission is Sheila Newman's Master's thesis of 2002: "The Growth Lobby and its Absence: The relationship between the Property Development and Housing Industries and Immigration Policy In Australia and France 1945-2000 with Projections to 2050". It is over 340 pages long including the core document which is 248 pages long. There are 10 pages of listed references, both English and French. Both it (pdf 2.6Mb) and the submission to the Housing Affordability Inquiry (pdf 1.6Mb) can be downloaded from here:

http://www.candobetter.org/sheila

Pericles and Foundation, you both appear to be clutching at straws. Both of you have ignored many of the key points in my earlier contributions, and have instead, tried to score points by attempting to shift the focus onto side issues or by attempts to attack the credibility of Sheila Newman.

What you have done in your latest posts is to take a number of quotes from Sheila Newman's submission out of context and then 'rebut' each quote, in turn, with arguments that few readers will be able to follow, no doubt hoping that they will just take your word for it.

Foundation, you attacked me (http://forum.onlineopinion.com.au/thread.asp?article=4834#54912) for not having, up until then, that I had not, up until then, responded to those side issues you raised(http://forum.onlineopinion.com.au/thread.asp?article=4834#54677). Now that I have, you have, so far ignored that response.

I will get around to showing up the nonsense in your last posts as just that, if someone else doesn't do it for me first, but not today.

daggett, I read both the presently referenced document and the "masters thesis" with its 835 footnotes.

You can protest all you like, but the quality of both documents as evidence is dubious. As for the thesis, it may be of a standard that achieves a Masters Degree, but it is in no sense the result of impartial, academic research.

Speculation is presented as truth, supported by an impressive-looking footnote, simply because someone had previously made the same random connection between facts.

The writing is careless, often banal...

>>Marxism and capitalism co-incided in the belief that humans created as much wealth as they needed by extracting it and moulding it, almost like clay<<

and the observations frequently questionable...

>>But since business was booming there was plenty of money to start up new businesses for nearly every worker that presented, and automation was more of a choice than a competitive necessity<<

No footnote for that one, I noticed.

But I am being unfair, and did not start with the intention of bagging someone's writing. I simply asked the question - which still begs an answer - what is it about France that makes it a valid comparator with our own situation?

If, as someone pointed out earlier, Ms Newman was not paid for her endeavours, the question is even more important. Spending vast sums of money - it is not cheap travelling to Europe, even for a student - on a project that compares such disparate communities would not have been undertaken lightly, I wouldn't have thought.

So what was the rationale? Inquiring minds would dearly like to know.

Pericles, I recall that you were caught out(http://forum.onlineopinion.com.au/thread.asp?article=4163#35699) on another thread deliberately misquoting(http://forum.onlineopinion.com.au/thread.asp?article=4163#35692) Wikipedia on the subject of overpopulation(http://en.wikipedia.org/wiki/Overpopulation).

No doubt, whatever drove you to do this is also driving you now to resort to all kinds of ploys on this thread to divert the attention of others away from the substance of my argument which is backed up by Sheila Newman's submisssion to the Housing Affordability inquiry, which is, in turn, based on Sheila Newman's Masters thesis of 2002 (see http://www.candobetter.org/sheila). Firstly, you try to imply that the submission was based on selective sources. When I showed that the thesis upon which the submission was based had ten pages of sources listed, you then attempt to divert us into a discussion about Sheila's writing style using a short quote, which you claim is "careless, often banal", but which seems perfetly logical and clear to me.

The reason for using France as a comparator should be obvious, and in any case is explained in Chapter 1 of the thesis. Clearly this country's housing policies have not worked in recent years as we now have the world's least affordable housing. Surely it is of interest to see whether we can do better by comparing Australia with another country which has, at least until very recently managed to provide all of its cititznes with affordable good quality housing.

If you can't begin to address the substance of my arguments and the substance of Sheila Newman's thesis, then your posts to this forum are a waste of everbody's time.

Darn word limit got me again.

Dagget wrote "I will get around to showing up the nonsense in your last posts as just that, if someone else doesn't do it for me first, but not today."

Why continue an off-topic debate? I'd love to tear this piece of garbage to pieces, sentence by sentence if required. Bit of a waste though.

"If you can to prove that increasing population, and hence demand, does not increase the cost of housing then I, and a lot of economists, not to mention property speculators, would be amazed."

Not true. Economists understand full well that supply-side elasticity allows an increase in demand without higher prices. Over the last decade, the supply of new dwellings (~1.8 million dwellings) has exceeded underlying demand from population growth (~2.2 million persons), yet prices have risen dramatically. This would be evidence enough for a qualified economist to rationalise that population growth is not increasing the cost of housing, only the STOCK of housing. I agree, property speculators would be amazed. That is because they are generally incredibly stupid (also selfish and ultimately financially doomed).

"Perhaps, in theory, we could provide affordable housing for a significantly larger population, but only at the expense of our environment, our quality of life and of our long term sustainability..."

Of course increases in population place pressures on the environment and our resources. But this is about housing affordability and economics. Immigration and population issues belong in the people/politics forum and environment, environment. They are important, but completely irrelevant in the context of this discussion.

Likewise, if Sheila and her ilk / supporters have actual reasons to oppose immigration, they should express them appropriately, and not hijack other serious issues such as the housing crisis in order to further the pushing of unrelated barrows. Her argument that lobby groups influence public policy on immigration is valid, though the level of influence is arguable. Evidence that this significantly influences houseprices is absent.

Supposing every migrant bought a house, one each for every man, woman and child (uh-huh) who arrived. This would, at the peak of the boom, have accounted for 116,500 sales in the 2002/2003 year (ABS3412.0). Loan approvals (ABS5609.0) 2002/2003 for purchase of existing or new dwellings for _owner-occupation_ totalled 635,000.

5 years earlier, net migration was 106,200 (ABS3412.0), and OO loan approvals totalled 477,000 (ABS5609.0).

So, even if every single new migrant bought a house (and they sure don’t), the increase in annual demand from pre-boom to peak-boom would be 10,300 dwellings. The increase in annual supply was 158,000 – almost 148,000 more dwellings than could be (ir)rationally explained by immigration demand.

Let’s look at just ONE other source of demand – investors.
In 1998 they accounted for 30% of all new housing finance, by the end of 1993 this had risen to over 40% (ABS 5609.0 Table 11), and 50% in some cities. Sure, you say, they were renting them to migrants…

1998 – 2003 saw rental vacancy rates rise from 2.5% to 4% (RBA), while rental costs fell (adjusted for inflation). This indicates over-supply of rental property. Yet prices doubled.

Is this a bubble? Hell-yes! Will it correct? Of course. Will the fall-out be ugly? Doubtless. Can we blame foreigners? _NO!!_

It’s our fault. Our reckless accumulation (and supply) of debt. Our greed. Our motto “Houses for profit, not people”. Our disregard for the needs of the younger generation. Our $6 billion annual subsidy/welfare payment directly to private landlords (CRA + Neg-gearing). Our belief that house prices never fall. Our certainty that asset inflation will exceed borrowing costs (interest) indefinitely, and that this state exists in a balanced economy. Our refusal to save in times of plenty for the inevitable lean times ahead. Our fault, our fault, OUR FAULT! Not ‘theirs’.

- - - - -

One last look:
1998-2003 popgrowth = 6.2%, REAL HPI = 54%
1988-1993 popgrowth = 6.2%, REAL HPI = -4%
…but we shouldn’t compare apples to apples. Let’s see, in France…

ABS, Abelson & Chung (2004)

- - - - -

daggett, that desperate and emotional little stab that eclipse aimed at me back in March was but a single shot in a fusillade. I was pointing out that the slogan, "Resources / population = lifestyle!" was a poor substitute for clarity of thought, while eclipse was getting hot under the collar defending the indefensible.

So you have managed to take it entirely out of context - which, guess what, is exactly what eclipse took me to task on, all those months ago!

Ironic, eh!

>>you then attempt to divert us into a discussion about Sheila's writing style using a short quote<<

The word limit here prevents a thorough analysis of Ms Newman's quoted pieces, hence I could only offer a couple of short examples of their muddled thinking.

>>The reason for using France as a comparator should be obvious<<

In order to compare two items in the hope that a change in one might provide clues to change/non-change in the other, you need to establish some form of credible baseline.

For example, you have two cricket balls, one that has been in use for eightyfive overs, the other still new. Since they both started off in the same condition, it is possible to posit that it is eightyfive overs of usage that caused the changes.

My first issue is the use of recently post-war France, given that not a single Australian dwelling had been destroyed during that conflict.

Add to that the war damage to each economy and the similarities are so few as to be derisory.

Then there are the small issues of population density, and the relative age of buildings in Sydney and Paris...

Sorry. No baseline, just a conveniently pleasant place to spend ones vacations.

>>If you can't begin to address the substance of my arguments and the substance of Sheila Newman's thesis, then your posts to this forum are a waste of everbody's time.<<

What you mean to say is

>>If you can't agree with my arguments and the substance of Sheila Newman's thesis, then your posts to this forum are a waste of my time<<

Foundation (http://forum.onlineopinion.com.au/thread.asp?article=4834#55106),

No, our raising of the issue of population is not an attempt to hijack the discussion and steer it in a different direction. If property speculators, who wish to drive up the cost of housing, believe that immigration driven population increases achieve that as I have extensively shown, then I would have thought that we are entitled to also argue that that is the case.

You wrote:

"Over the last decade, the supply of new dwellings (~1.8 million dwellings) has exceeded underlying demand from population growth (~2.2 million persons), yet prices have risen dramatically. This would be evidence enough for a qualified economist to rationalise that population growth is not increasing the cost of housing, only the STOCK of housing."

Firstly, it needs to be pointed out that statistics from the ABS, presuming that that is where you got them from, have become less reliable due in part to the outsourcing of their collection at airports.

Nevertheless, in a superficial sense, if we accept these figures they seem to suggest that immigration pays for itself and that only factors other than immigration are causing the current housing hyper-inflation. If we take a narrow view that doesn't take account of the costs to our natural environment and which equates the ever more cramped and ever more shoddily built 'dwellings' of today, lacking outside sheds and gardens, with the free standing homes many on quarter acre blocks that were the norm a generation or more ago, then this may have some validity.

However, we can't. For a start, immigrants don't bring with them their own land, particularly land in pleasant locations next to natural beauty and/or amenities (aka 'positional goods'), and this, rather than 'dwellings' is the commodity that property speculators ultimately speculate on, and the value of this investment has clearly skyrocketed as a direct consequence of increased population size. Furthermore, it would be reckless and irresponsible to implement policies to achieve affordable housing which disregard the costs to our natural environment and long term sustainability.

(Continued here: http://www.candobetter.org/node/9#continuation)

Daggett “firstly, I don't particularly care whether or not you engage in personal attacks.”

Then do not insinuate same in pursuit of “spicing up” your postings.

Most people of the 1970’s struggled to afford a house, most people of the 2000’s struggle to afford a house. “Affordability” is always hardest for any individual in the first year of house purchase and easier with each subsequent year of occupancy. Whine all you want, your perspective is not proven by social history, regardless of the ramblings of The Age, a rag of which the has pretensions on a scale insulting to most, would not know how difficult it was to buy a house in London in the 1970’s. As one who did, I can assure you, Australia still has it sweet.

Btw, your ramblings about France. A significant influence on French provincial property prices is the influx of English Pounds into the peasant economies of non-metropolitan France, the wealth of London having bought up the available properties in other parts of UK (namely Wales) back in the 1970’s and 1980’s, making home ownership less “affordable” for the locals.

Before we have to read any more of your good-old-home-spun-economic-rhetoric,

Sit back and watch as house prices become more “affordable” in the coming months.

As the recent interest rate increases “bite” they will slow down the economy, reduce consumer confidence and spending, edge us closer toward recession (versus boom) and push the marginal borrowers and the foolhardy, who are in over their heads into bank repossession sales.

AND it has all happened before - like the early 1990’s when, under socialist incompetence we had the recessiOn we had to have. Australian property prices cosequently fell, which immediately lead to greater housing “affordability”.

As for me, I am sat on a war chest, thinking about taking advantage of the coming soft housing prices (although, investing being a competitive thing, I do have projects which promise far better returns, so might give housing a miss).

- as the old saying goes, "Speculate to Accumulate"

Mr Bartlett,

In a subsistence society a legitimate child is born with land rights; illegitimacy equates to being born in a situation that does not entitle the person to land. Not having land-rights means that a person has no means to survive independently. Having to slave to keep a roof over your head is a step well down from land-rights. No citizen should have to put up with this.

Following the lines of the British system and lacking the land-redistribution of the French Revolution, English speaking societies have evolved where the land-tenure system allows legitimate children/citizens to be disinherited. They are born to parents who have nothing but their labour and who can accumulate little in our system.

The State may accord them certain rights of citizenship, often of a marginal variety such as right to compete for employment and housing but no guarantees.

Industrial societies rely on a working class which lacks sufficient land-rights for independent self-support, because, otherwise, it could not get enough workers for the many socially and environmentally costly industries that profit a select few and cost the majority more than money.

These differences in social structure and function are well illustrated by the quote below from: www.humanities.cqu.edu.au/abtorres/52246/52246sg,p.73..

"...In ... Aboriginal societies ... there was/is never any need to produce ‘surpluses’ so that the labour of many could/can sustain the wealth of a few — a primary characteristic of what we usually call ‘civilisation’- where oppression of both our fellow humans and of the natural world are fundamental to what passes for ‘civilised’ society. [Add slavery, widespread conquest by warfare, writing, and building in stone, and you get a ‘Great Civilisation’, such as ancient Rome or China!]"

You can add Australia, Britain and the USA to that list!

Between hunter gatherer society and Anglophone capitalism, there are some choices. If we care about citizens rather than a self-appointed caste of rentiers, we should emulate France in housing, citizenship and population policy, IMHO, Mr Bartlett.

It would be better for all forms of business except corporate and speculation.

Col Rouge(http://forum.onlineopinion.com.au/thread.asp?article=4834#55236),

If you choose to reveal personal details about yourself (http://forum.onlineopinion.com.au/thread.asp?article=3737#13522, http://forum.onlineopinion.com.au/thread.asp?article=4834#55236) then don't be surprised if others point out how your personal circumstances may guide your opinions.

Even though I have shown (http://forum.onlineopinion.com.au/thread.asp?article=4834#53621) that the private property market costs the community far more than what publicly owned housing would, you see it as in your personal best interests that the costly, inefficient and environmentally destructive private system is perpetuated.

That housing prices may be about to drop is beside the point. Of course they won't go up monotonically without an occasional dip here and there. As it happens I bought into the market in 1989 with my then partner. The market then immediately slumped, and for the next seven years until we sold the house, we paid for the windfall profits of a previous generation of property speculators with our sweat as we worked hard to make the repayments.

You tell us that the same is about to occur now. This would be precisely because, in recent years, some homebuyers would have bought the argument put by yourself (http://forum.onlineopinion.com.au/thread.asp?article=4834#53848) that "entering the housing market is always tough in one's first year and easier in each subsequent year." As a result, many homebuyers have overcommitted themselves and now, it seems, many people, yourself included, make little effort to hide the fact that they may soon be in a position to take advantage of their misfortune as housing prices fall momentarily before they resume their inexorable rise.

You wrote "as the old saying goes, 'Speculate to Accumulate'"

Speculation, whether in property or in other commodities, is essentially about the transfer of wealth from one sector for society to another. People who have the means to acquire commodities cheaply that may be needed by others at a later point in time do so and charge higher prices when others are in a position to buy.

Speculation creates no wealth in its own right and, as such this form of activity is a burden on the rest of us. In a healthy economy, there would be very little room for speculation.

Pericles(http://forum.onlineopinion.com.au/thread.asp?article=4834#55141),

What I find to be 'indefensible' is to ignore the evidence that population growth is the major driver of the decline in our quality of life, the destruction of our environment and a threat to our long term sustainability, not ot mention housing inflation.

What nobody should find to be 'defensible' is to misquote an authoritative source in order to bolster your own position in a debate. Here's what you wrote (http://forum.onlineopinion.com.au/thread.asp?article=4163#35692):

"You keep exhorting me to read your sources eclipse, but I wonder whether you actually read them yourself. Wikipedia
clearly states:

"'Overpopulation is not merely an imbalance between the number of individuals compared to the resources they
need to survive, or a ratio of population over resources.'

"There goes "Resources / population = lifestyle!" Exclamation mark and all."

However, the Wikipedia entry (http://en.wikipedia.org/wiki/Overpopulation)states :

"Sometimes, overpopulation is not necessarily an imbalance between the number of individuals compared to the resources needed for survival, or a ratio of population over resources. This is because such an imbalance may be caused by any number of other factors such as bad governance, war, corruption or endemic poverty. ..."

Note your omission of "Sometimes" at the beginning of the sentence. Earlier on the article said:

"Overpopulation is ... the number of individuals compared to the resources (ie. food production) they need to survive. In other words, it is the ratio of population divided by resources."

Clearly the authors of the Wikipedia article do regard resources/population as the critical determinant of overpopulation. However, your contribution misrepresented their acknowlegement that there are sometimes exceptions to this general rule as their being against this general rule altogether.

You wrote (http://forum.onlineopinion.com.au/thread.asp?article=4834#55054):

"You can protest all you like, but the quality of both documents as evidence is dubious."

I don't see why we should regard you, rather than, for example, the examiners of Sheila Newman's thesis, to be the unchallengable authority (http://forum.onlineopinion.com.au/thread.asp?article=4834#55054) in regard to the merit or otherwise of her thesis, especially when you have shown yourself to have been be so loose with the truth.

daggett, the more time you spend breaking this particular butterfly on the wheel of your erudition, the less convincing you become.

For a start, you overstate the significance of the word "sometimes" at the beginning of Wikipedia's entry:

"Sometimes, overpopulation is not necessarily an imbalance between the number of individuals compared to the resources needed for survival, or a ratio of population over resources. This is because such an imbalance may be caused by any number of other factors such as bad governance, war, corruption or endemic poverty. ..."

Despite your pedantry over the omission of one word, it is sufficient to reduce the slogan...

"Resources / population = lifestyle!"

...to the intellectual level of "What do we want? Justice! When do we want it? Now!"

Intrinsically flabby and meaningless, despite the apparent well-intentioned nature of its objectives.

Your assumption that the "sometimes" (qualified, you will note, with factors 'such as bad governance, war, corruption or endemic poverty') reduces it to the position of an exception that proves the rule, is tendentious in the extreme. I am sure that you as well as I can name several countries where natural resources are abundant, the population sparse, but the "lifestyle" is abominable. Are they all, perhaps, "exceptions"?

To use this as the sole hook upon which to hang the charge that I have "shown [my]self to have been be so loose with the truth" is to draw the longest of bows, if you will allow the painfully mixed metaphor.

Incidentally, it was you rather than I who proposes that I am "the unchallengable authority" on Ms Newman's work. I have absolutely no idea how her examiners assessed the value or otherwise of her contribution, but they clearly didn't spend a great deal of time working out whether it made any sense. Quite possibly they were impressed by the sheer quantity of the references, and the fact that some were in a foreign language.

And amid all of your protestations, you still fail to offer an answer to my original question.

In case you have forgotten, it was "why France?"

Pericles,

You may rationalise it all you wish, but I have shown (http://forum.onlineopinion.com.au/thread.asp?article=4834#55320) that your misquoting of the Wikipedia article on overpopulation (http://en.wikipedia.org/wiki/Overpopulation) served to lead readers to believe that its authors were not arguing that:

overpopulation = population/resources

As your posts would have misled readers on that forum, you have attempted here to divert attention away from the underlying weakness in your case by your self-serving insulting pronouncements on the quality of Sheila Newman's work, without bothering to show where her underlying arguments are wrong. (And please don't plead that you don't have space. Anyone can get free space on the web, eg. at www.blogspot.com, or you can even post to http://www.candobetter.org/node/9 if you wish.)

Once, again, back to the main issue at hand:

The thesis upon which the submission to the Housing Affordability is based, (see http://www.candobetter.org/sheila for both documents) shows incontrovertibly that by increasing the population level, mostly through increased immigration, increases the value of land in which property speculators speculate. This is not to deny that other factors also add to housing inflation, or that on occasions an oversupply of housing may lead to a temporary fall in prices, but the long term trend and the cause and effect are clear from the graphs contained in the submission. Once again, see:

http://www.candobetter.org/sheila/housingPriceRisesInCapitalCities.jpg
http://www.candobetter.org/sheila/housingPriceRisesInRegionalAreas.jpg
http://www.candobetter.org/sheila/housingPriceRisesInFrance.jpg

These conclusions were accepted by the inquiry. This is also what our intuition should tell us and what I have shown to be common knowledge amongst property speculators.

I had already answered the question "Why France?" above (http://forum.onlineopinion.com.au/thread.asp?article=4834#54827), and a more detailed answer is to be found also in the abstract to the thesis, to be found here : http://www.candobetter.org/sheila/thesisAbstract.html.

There are enough similarities between our two societies for us to be able to draw useful conclusions as to whether or not we stand to benefit by adopting the policies of France in regards to population stability and laws designed to curtail property speculation. These laws have allowed its citizens, at least up until very recently, to enjoy decent affordable housing.

If you disagree then please argue your case why.

Dagget claims: “The thesis upon which the submission to the Housing Affordability is based shows incontrovertibly that by increasing the population level, mostly through increased immigration, increases the value of land in which property speculators speculate.”

And once again, I say… No. It doesn’t.

Dagget claims: “These conclusions were accepted by the inquiry”

Again I say “No! This is blatantly untrue!” Let’s read what the PC’s report actually says in relation to population growth.

P19. “The major determinants of the underlying growth in demand for additionaldwellings are population growth and the propensity of people to form households.Both have played a significant longer-term role, but do not explain the surge in demand and prices since the mid-1990s.”

Note 1: Demand for additional dwellings
Note 2: “do not explain the surge in demand and PRICES”

P22. “…realistic expectations about income and population growth, or other ongoing drivers of housing demand, cannot support a continuation of recent price growth.”

P73. “Population growth and the trend towards smaller numbers of residents per household (chapter 4) will have similar price impacts.”

Note: Read this sentence carefully. Perhaps it does not say what you’d think?

P93. From FINDINGS “Growth in immigration since the mid-1990s has been an important contributor to underlying demand,… …overall population growth has not been a key driver of recent rapid increases in house prices”

Note: Underlying demand. Not prices.

P95. “This suggests that population pressures have not been a major cause of the recent acceleration in house prices across the country,”

P101. “despite higher national immigration, annual population growth in most cities and states has been either lower or only marginally higher since the start of the recent housing boom, than it was in the preceding five year period”

P103. “Since 1996, there has been virtually no population growth in the 25 to 34 year old age group, which is likely to include most first home buyers”

P104. “The conclusion that population growth and household formation trends have not been major drivers of the recent national increase in house prices is supported by estimates of the underlying demand for dwellings.”

The report’s KEY FINDINGS:

"+ Fluctuations in prices and ‘affordability’ are inherent features of housing markets.

+ The upswing in housing prices since the mid-1990s has been bigger and more widespread than in previous cycles.

+ Rising house prices indicate that demand has been outstripping supply.
– Much of this increase in housing demand has been due to cheaper, more accessible finance and buoyant economic growth through the 1990s.
– This led to higher prices because of inherent limitations on the responsiveness of housing supply to surges in demand, particularly as much of the demand came from existing home owners seeking to ‘upgrade’ in established areas.

+ Only in the last couple of years have house prices surpassed levels that are explicable on this basis, with some additional investment seemingly predicated on unrealistic expectations (in a ‘supportive’ tax environment) of ongoing capital gains.

+ To the extent that currently low housing affordability reflects cyclical price pressures, this will eventually be reversed. (Evidence of market cooling is already emerging.) However, there is a role for policy to address forces that can cause prices to be excessive over the entire housing cycle.

+ Interactions between negative gearing, ‘capital works’ deductions, post-1999 capital gains provisions and marginal income tax rates have lent impetus to investment demand during the housing boom.

+ Reducing reliance on stamp duties would help first home buyers and improve the efficiency of housing markets over time.

+ There is also scope to moderate price and affordability pressures over time by:
– improving land release and planning approval processes; and
– ensuring that developer charges for infrastructure relate appropriately to the benefits provided to home buyers.

+ The First Home Owner Scheme, though conceived to compensate for the GST, would have more impact on home ownership if better targeted at lower income households.”

No mention of immigration. Plenty of factors that HAVE decreased affordability. The only reference to Sheila’s work was its inclusion in the list of submissions. Would people please refrain from further claims that the Productivity Commission endorsed or agreed with the views of this submission?

Foundation,

You wrote yourself that the inquiry concluded : "The major determinants of the underlying growth in demand for additional dwellings are population growth ...".

Of course no-one, Sheila Newman least of all, has denied that there are other factors which add to housing inflation. What you are trying to do is to use the fact that there are other factors to obfuscate on the question as to whether population growth, itself, is a major cause. It obviously was back then and is today, most of all, in Queensland and in Western Australia.

Do you seriously expect us to believe that we can go on adding 140,000 per year to our population and not have the cost of housing go up? Clearly the REIQ believes it will as I have shown above. Tell me why you believe they are wrong.

Also, how about addressing my arguments the environmental destruction caused by population growth and the building of housing for the additional people - the fact that Moreton Bay is filling up with silt and the fact that ever more tracts of native bushland are being lost, etc, etc? How do you think we can go on providing housing for an increasing population and avoid this destruction? Surely the cost to the environment and the cost to future generations of creating the additional housing has to be factored in when we consider whether or not housing can be made affordable.

Will be back ....

daggett, you have a strange approach to discussion.

If you make a statement like "Australia is the same as France", I am surely entitled to ask "on what basis do you draw that conclusion?"

Your response is little more than "because I say so" - or, more accurately, "because she says so".

I then point out some areas in which the countries clearly differ, and which have a bearing on the relevance of their relationship, and you take the offensive "if you disagree then please argue your case why"

How can I agree or disagree when the basis of the comparison is still a mystery?

I have stated my reasons for believing they do not qualify as comparators. You have yet to challenge these.

Pericles, you wrote(http://forum.onlineopinion.com.au/thread.asp?article=4834#55430):

"... you still fail to offer an answer to my original question.

"In case you have forgotten, it was 'why France?'"

This is yet another lie which can only serve to mislead those trying to make sense out of this discussion.

Kanga, Olduvai and I have provided answers to these questions. The fact that you deem them to be unsatisfactory does not mean that we have not offered answers to the question.

As an example, Kanga wrote:

"Housing in France (and much of Western continental Europe) is very affordable in comparison to Australia's.

You dismissed this, saying "Many other countries can also claim this attribute. Why pick on France?"

Well, Pericles, why not France?

In any case, if you had bothered to look at the contents of Sheila Newman's submission, which you tell us that you have read, she refers to a number or other countries including Germany, the UK, Spain, Italy, Holland, Belgium, the USA and Canada.

Are you going to also turn around and demand that we also defend the comparison of Australia to each of these countries in turn? If you dispute that France or any one of these countries make valid comparators, then what comparators would you suggest, and why?

Or perhaps you dispute altogether the validity of comparing Australian housing policy with the housing policies of a single other country?

Your seeming attempts to mislead and to to divert the discussion away from the substance of my posts and Sheila Newman's thesis and her submission to side issues, can lead me to no conclusion other than that you have no wish to seriously discuss these issues.

Rather, it seems that you intend to misuse your voice on this forum to prevent people understanding the evidence which shows that population growth leads to the increase in the price of land and that is why property speculators have lobbied fiercely in favour of it, without any regard to the welfare of those already living in this country, our environment or our long term sustainability.

Dagget, you appear to be following the incumbent governments’ philosophy, that anything repeated oft enough becomes truth. Also known as the "three men make a tiger" theory.

Ignoring your second point, as once again, you attempt to steer the debate (housing affordability) to an unrelated topic (anti-immigration) to suit your personal agenda.

To your first point - "demand for additional dwellings" does not necessitate higher house prices, as previously shown. The report makes this distinction, if you'd bother to read it. Elasticity of supply is key.

"Do you seriously expect us to believe that we can go on adding 140,000 per year to our population and not have the cost of housing go up?"

Yes I do. I believe we could add 200,000 per year to our population next year and house prices would still fall dramatically across much of the country. Impossible? No. Japan's population growth averaged ~250,000 pa as land prices fell for 14 years! The Economist says it's true (therefore possible) and I'd be more inclined to believe them than SPA... Furthermore, last year their population began falling, yet land prices rose!

"Clearly the REIQ believes it will as I have shown above. Tell me why you believe they are wrong."

Some realestate groups may simply promote this myth to give investors confidence in the market. Bowling slow, relying on ingrained beliefs and prejudice for easy pickings. Collecting, controlling and malnipulating the data to suit.

Dagget says "What you are trying to do is to use the fact that there are other factors to obfuscate on the question as to whether population growth, itself, is a major cause."

It's not a major cause.

P93 of the PC report says "overall population growth has not been a key driver of recent rapid increases in house prices"

"NOT BEEN A KEY DRIVER"

Secondly, these 'other factors' are the very cause of the crisis in housing affordability, as evidenced by the PC report, and various RATIONAL submissions. We SHOULD be discussing these, yet you accuse ME of obfuscation?

Pericles & Foundation,

Pericles' remarks make it impossible to believe that he has read Newman's thesis.

1. To solve the mystery of comparison Pericles claims exists, he needs to actually read Newman's first chapter for an explanation of the basis for comparison between the two countries. He should also consult the second literature review in the work under the heading "Systems of Land Development Planning", which reviews other inter-country comparisons of land-tenure/housing systems.
it http://www.citizensagainstsellingtelstra.com/downloads/housingImmigration-newman2002.pdf

2. Population density has almost nothing to do with the size of a country, so Pericles'statement about density is too silly and vague to counter. Newman's thesis is all about comparative population statistics; read and learn. There is a detailed analysis of comparability, reliability, definition, validity for all stats used in the statistical appendix (available at Swinburne Library). Newman's work was groundbreaking.

3.Foundation, I am keen to verify and understand the validity of your correlation test, so please provide the exact data (sources and figures, variables and definitions of indicators etc) you manipulated to make your statement applying Pearson's correlation. We do not have Newman's figures to hand; we assume that you do. Please include calculations.

4. With regard to Daggett's statement that the Productivity Commission had accepted the relationship between population growth and rising land prices, the source of their comparison graphs (p.5) was BIS Shrapnel (2002)and the relative terms of the enquiry were at pages 13-14. The item you quoted from the final report should be seen in its context. Clearly the Inquiry knew the effect of population growth/pressure/demand:

"Population pressures have not contributed greatly to the demand surge that has caused affordability in the capital cities to decline sharply over the last year or two (chapter 4).
While those encouraged to move to the regions may be able to purchase more affordable homes, as is already evident, the additional demand pressure is likely to reduce affordability for aspiring first home buyers already living in those areas."

5. Biased Foundation should apologise for the unfair attack he made on Daggett, as "pursuing a personal agenda on an unrelated topic"

“provide the exact data (sources and figures, variables and definitions of indicators etc) you manipulated to make your statement applying Pearson's correlation.”

Manipulated? The figures are right there in the report, at the reference I provided in my original quote:

P59. (reference)"Although there is a correlation, this does not prove causation [...] The Wrap Up - Immigration=Demand "

Here they are:
“State % Ownership % Foreign Born
US 68% 11%
DC 43% 13%
NY 54% 20%
HI 56% 18%
CA 58% 26%
RI 60% 11%
MA 61% 12%
TX 64% 14%
NV 65% 16%”

And yes, Pearson’s is –0.19, p-value is 0.62. Not statistically significant.

“Please include calculations”

Ma’am, if you can’t do the maths yourself, you’re not going to follow… Anybody else prepared to independently confirm?

“The item you quoted from the final report should be seen in its context. Clearly the Inquiry knew the effect of population growth/pressure/demand:”

Your addition of peripheral words does not change the context at all! Read it slowly!

“Population pressures HAVE NOT CONTRIBUTED GREATLY to the demand surge that has caused affordability in the capital cities to decline sharply over the last year or two.”

In fact, the following sentence (which was a separate dot-point in its original context), relates to buyers whom move to regional areas from the city, and their ability to outprice locals. Surprise, surprise, people from the city have more money than people from the country, AND we hicks didn’t have an equal elasticity in supply of buildings – why would builders take on country jobs when better money was available in the city?

In fact, if you are supporting those 2 points, you are arguing that regional prices rose as a result of unnaffordable city housing that WAS NOT caused by IMMIGRATION. Therefore you are logically arguing AGAINST Ms Newman’s submission.

If you insist on supporting your arguments with those charts, please at least update them with the last 4 years data. The massive boom in France and regional Aus, vs static prices in ESB cities, blows a massive hole in your theory.

“apologise”

Sorry… but I decline!

July 31, 2003 Housing Debate Transcript from SBS Date Sat, 2 Aug 2003 03:33:29 +1000
Robert Mellor, director of building services for the global research and forecasting company BIS-Shrapnel:

"Well, I still think over the next few years in an environment of very strong economic growth, very strong population growth, that we're still going to see quite strong house price growth. (…) particularly in cities like Sydney and Brisbane, and that's going to be driven by that continued high population growth (…)."

"(…)I think the critical thing is we are seeing much higher population growth coming in from overseas than what we were, say, three or four years ago. At the moment we believe the latest estimates from the Bureau of Stats are showing that overseas migration into Australia is running at about 140,000 per annum. That compares to around about 100,000 per annum for the latter part of the 1990s. So that's a critical driver. Not all of those people are out into the housing market as owner-occupiers but certainly it's adding to demand particularly from a lot of students studying here in Australia from overseas and that's adding to rental demand in many markets. So, you know, whichever way you look at it, stronger population growth ultimately flows through for demand to housing whether we're talking owner-occupiers or renters."

"(…) Government policies are not going to change the outlook for the market in the next two or three years. Obviously, for many people in the market, over a long period of time, house prices are rising faster than wages. I mean that's the reality. I mean, if you look at the long-term figures going back even 20 and 30 years, you're looking at around about a 3 percentage point increase per annum above inflation."

"Well, you can argue in the short-term, basically, if you encourage more people into the marketplace they will bid up prices, particularly in a boom market. (…)I think one of the dangers is that any additional money that people have at their disposal will ultimately bid up prices further.

Foundation,

The problem I have with your last post is that while it appears authoratitative, it is difficult to comprehend. So, even if I felt convinced and wanted to argue your case, I wouldn't be able to on the basis of that post.

This leads me to suspect that rather than being aimed at clarifying the issues to curious critical enquiring minds, your post is intended to once again obfuscate the essential issues.

Presumably you hope that some readers will assume that their inability to comprehend your post is due to your being so much smarter than they are rather than what I believe to be the more likely explanation, that is, that what you have written is gibberish.

On your Pearson's Correlation argument, the figures provided were within a letter from Steve Kropper quoted in the submission. Steve Kropper is "Vice-President for Strategy at Primedia which owns RealEstate.com". The figures relate to the US and do not appear to have been critical to the case which Sheila Newman was trying to make about the correlation between population increases and real estate prices in Australia. The main purpose of including the letter seems to have been to illustrate how even property speculators, themselves knowing of the adverse consequences for the future of the United States caused by immigration, nevertheless advocate it in order to serve their own interests.

I would be interested to see what Pearson's correlation p-value figures you can come up with the graphs (also listed above):

http://www.candobetter.org/sheila/housingPriceRisesInCapitalCities.jpg
http://www.candobetter.org/sheila/housingPriceRisesInRegionalAreas.jpg
http://www.candobetter.org/sheila/housingPriceRisesInFrance.jpg

Kanga, I read the first chapter of Ms Newman's work with the sole intention of discovering the links that make France and Australia a relevant comparison. There is nothing there.

And I notice that neither you nor daggett can point to where she makes the link, nor indeed provide a quote from the document that would clarify matters.

The major point that is made, throughout the work, is that the systems in France and Australia are different. In fact, they are very different, according to Ms Newman:

>>Nationally co-ordinated Land Development Planning : This is France's system. It is a [sic] nationally based and co-ordinated and involves State direction of public land. Uses are planned a long time in advance.

...Statutory or Land Use Planning : This is Australia's system. Australia's planning system reflects that Australia is a market liberal and federal society. There is no national planning system as planning is the responsibility of the states and local government.<<

Clearly, if all - or even many - other features of the two countries were in some way similar, this would be an entirely valid basis for comparing outcomes. One system produces, this result, the other system produces another. The different results are the product of the different systems, QED.

But as I mentioned before, there are sufficient fundamental differences in population, population density, climate, concentration of industry, physical distance between population centres and a host of other factors that disqualify France as an effective comparator.

All you are left with is "the systems are different, and have different outcomes", without the essential connection of cause and effect. Groundbreaking?

>>Population density has almost nothing to do with the size of a country, so Pericles'statement about density is too silly and vague to counter.<<

What a weird statement to make. I merely indicated that population density is another variable in the cost-of-housing debate. To infer that I claim it is somehow related to the size of the country is absurd. But it gives an indication of how low you will stoop to grind out some kind of argument.

Daggett “People who have the means to acquire commodities cheaply that may be needed by others at a later point in time do so and charge higher prices when others are in a position to buy. “

Now lets put this another way, when the market is “falling” the bad speculators “buy” in a flurry of “counter-cyclical” enthusiasm, thus breaking the free fall and stabilizing the market price. Conversely, when the market is “rising” the nasty “speculators” off-load their property and thus, satisfy the demand, leading to a flattening of a price spike before it reaches its peak. I would suggest the actions of such “speculators” almost warrants public recognition of their services in the “stabilization of market forces”

”Speculation creates no wealth in its own right and, as such this form of activity is a burden on the rest of us. In a healthy economy, there would be very little room for speculation”

On that basis, many things would qualify as “creates no wealth in its own right”. The only “burden” is the one a free individual chooses to pick up. The health of an economy could almost be measured by the amount of speculation being undertaken.

No oil well was ever pumped oil without a speculator pushing venture capital into the drilling of “dry-holes”. No medical breakthrough was every developed without a pharmaceutical company trialing a thousand failures. No successful music CD was ever heard without the recording company publishing 16 failures.

The property market is no different to the oil, pharmaceutical or music market. In fact, with more individual participants on the “supply side” and at least as many on the “demand side”, than any of the other examples, it has fewer imbalances, is thus less susceptible to “speculative forces” and is, thus, closer to a “perfect market” environment.

The motive force for all commercial endeavour is found in “speculation” of one sort or another.

Anyone who is so dismissive of “counter-cyclical speculation” has, obviously, no understanding of how a healthy economy really works.

“the more likely explanation, that is, that what you have written is gibberish.”

Ah yes, love your humour. Dagget, http://www.socialresearchmethods.net/kb/statcorr.htm is a good primer for correlation & significance.

“As in all hypothesis testing, you need to first determine the significance level. Here, I'll use the common level of alpha = .05. This means that I am conducting a test where the odds that the correlation is a chance occurrence is no more than 5 out of 100.”

In the data referenced above, the p=0.62 indicates that the odds of the (weak) correlation being coincidental are 62%. Any scientific hypothesis relying on a correlation that is probably chance would be instantly discredited.

I know it is a quote, cut and pasted as evidence for an answer to the inquiry question:

“To what extent has immigration influenced overall housing demand? Has it been a significant factor in the recent surge in housing prices?”

The submission also relies upon 2 additional supports in answering the question. The first “Dynamics of Immigration-fed demand and how it links with prices in Australia” relies on an assumption that increased demand for dwellings cannot be offset by increased building, and of course those graphs. The “how it links with prices” bit I couldn’t find.

The France comparison theory has been proven invalid by its recent boom as evidenced by The Economist:
http://www.electroniceconomist.com/images/20060909/CFN289.gif
France HPI 120% over 10 years versus our 126%.

I’ve updated those charts for you Dagget (please pass them to Ms Newman):

http://203.26.51.178/cracker/138813_2.jpg simply overlays the two charts comparing high-population and low-population growth cities, removing the scale-skewness of the originals. Still so cut and dry?

http://203.26.51.178/cracker/138813_3.jpg adds in another 3 years of data. Suddenly the theory looks more shakey. Certainly Ms Newman’s “low-population growth cities” appear to be following exactly the same trend as the “high” ones. In fact Hobart prices continued to rise even while their population was DECLINING during the late 90s and early 00s!

http://203.26.51.178/cracker/138813_1.jpg From the US FedRes shows that French prices did not return to trend as Ms Newman ‘hoped’. In fact they boomed as did ours.

Yes Kanga, BIS & Mellor do have a patchy record as far as forecasting house prices (not to mention IR%s!). As you pointed out, on July 31, RM stated:

"Well, I still think over the next few years in an environment of very strong economic growth, very strong population growth, that we're still going to see quite strong house price growth. Maybe not up around 20% per annum we've seen over recent years but we still could be seeing 10% per annum plus..."

He was wrong of course. The boom was already slowing by 07/03.

4 months later he'd changed his tune...

"7:30 Report 04/11/2003

TIM LESTER: Robert Mellor sees an INEVITABLE CRASH LANDING.

ROBERT MELLOR: At the moment, our view is rates could go to 10 per cent by the middle of 2006.

Without a doubt, by that point in time it will stop the market, particularly the residential market, stone dead and ultimately will send the economy into a recession some time in 2007."

Although that last stanza may prove to be his most accurate forecast...

- - - -

Abelson et al studied explanations of house prices, concluding "Consistent with economic theory, we find that in the long-run real house prices are determined significantly by real disposable income, the consumer price index, unemployment, real mortgage rates, equity prices, and the supply of housing."

Abelson P, Joyeux R, Milunovick G, and Chung D. 2005 : HOUSE PRICES IN AUSTRALIA: 1970 TO 2003 FACTS AND EXPLANATIONS, Macquarie University

- - - - -

Any number of stats can be found embedded in this document from the REIA - page 15 chart (right click, chart object, Open. Whoops):

http://www.reia.com.au/documents/Property_Profile_2004-05.doc

- - - - -

And the Victorian gov’t has supplied me this publication:

http://land.vic.gov.au/ ->Property Victoria -> Edition 12 November 2005

which has city versus rural prices 1985-2005.

Indexed to 1985=100, the chart looks like this:

http://img222.imageshack.us/img222/2231/melbournevsruralprices852005index10085hd4.jpg

and as an annual percentage:

http://img220.imageshack.us/img220/2849/melbournevsruralprices852005realannualtz8.jpg

Once again, no sign of the alleged/expected huge gulf between high-migration city areas and the bush… it doesn't even resemble Ms Newman's... Hmmm. The VicGov or SPA?

Foundation,

"Manipulated?"

The figures you attempt to correlate do not measure any relationship between population movement to and within Australia and land for housing prices here.

Your interpretation of my quote regarding regional migration is incorrect and contextually unfounded. If there were no in-migration to those regions it would not matter what the capacity to pay was.

Report p.59 "Findings"

"Growth in immigration since the mid-1990s has been an important contributor to
underlying demand, particularly in Sydney and Melbourne."

No-one on the forum claims that OVERSEAS immigration is the ONLY cause of RECENT high prices.

BUT it is the underlying driver of related population MOVEMENTS between states and within states which cause turnover & pressure related surges of demand to overlay Australia's natural increase rates. The Report supplies some information for the 4 years that Newman did not graph:

p.61: "At the state and territory level, as well as natural increase, population growth includes net immigration and net interstate migration. The combined effects of these two latter components of growth is shown in figure 4.3 for NSW, Victoria and Queensland. All experienced net inflows of population over the life of the current housing boom, with the strongest growth occurring in Victoria."

Immigrant and visitor arrivals

pp 64-65: "Net immigration is (…)an important component of population growth in Australia and has increased from a low point in 1992-93 (see figure 4.2). The ABS estimates that in 2002-03 there was a net gain of 125 000 persons through permanent and long-term movements. (…) more than four times the level in 1992-93, double the average net immigration level in the first half of the 1990s, and approaching the previous peak reached in 1988-89.

While the extent of the recent increase may be overstated by ABS net immigration estimates (see box 4.2), immigration has clearly added to demand. Moreover, housing demand will have been boosted in recent years by short-stay visitors who are excluded from the estimates of net immigration, but who have similar housing requirements to the resident population (see box 4.1)."

Apology owing.

“The figures you attempt to correlate do not measure any relationship between population movement to and within Australia and land for housing prices here.”

It was not “my attempt to correlate”. It formed a significant part of Ms Newman’s submission, which has been described here as “irrefutable” (which it isn’t) and “incontrovertibl[e]” “evidence” (which it isn’t), “far beyond the usual fudge” (bwahahaa!), “perfetly logical and clear” (huh?), its evidence “accepted” (which it wasn’t) by the commission.

This is why I’m refuting and controverting it by showing the ‘evidence’ does not exist or is false, that the report is fudge, whipped up by an anti-immigration-lobby group, and that it was NOT accepted as fact by the PCA. Their report consistently states that population growth was NOT an important factor in the recent house PRICE boom, as I’ve shown.

- - - -

“Net immigration is (…)an important component of population growth in Australia” etc.

Self-evident, but irrelevant. You need to understand the difference between population growth and house price growth. (Clue – one involves people and one, money).

“…housing demand will have been boosted in recent years…”

Self-evident, but irrelevant. You need to understand the difference between housing growth and house PRICE growth. (Hint – one involves houses and one, money)

“Apology owing”

My mummy says you should say sorry first. Seriously, how old are you?

Ma’am, sorry for what exactly? I have never disputed that as the population grows, more dwellings are needed. These dwellings have been built, in fact built to excess. The supply/demand equation is in a rough equilibrium.

Surely it is up to YOU to prove the link between population growth and INCREASED HOUSE PRICES?

“BUT it is the underlying driver of related population MOVEMENTS between states and within states which cause turnover & pressure related surges of demand”

With equilibrium in the TOTAL supply / demand, a localised surge of demand forcing up prices would be offset by a n equal and opposite reaction (drop in demand) where they had come from. This boom has been so all encompassing as to prove this did not happen.

Foundation(http://forum.onlineopinion.com.au/thread.asp?article=4834#55786),

I did understand what correlation is. The term I should have used was 'sophistry' rather than 'gibberish'.

Just a few points:

On Japan(http://forum.onlineopinion.com.au/thread.asp?article=4834#55661):
surely the most striking statistic is the enormous cost of land in Japan rather than the fact that a fall in housing prices may have accompanied a rise in the population of Japan and vice versa. I would suggest that the high cost of land has a lot to do with population density.

You quoted from the report above but tried to present the quote as saying something different to what it said(http://forum.onlineopinion.com.au/thread.asp?article=4834#55689):

"Population pressures HAVE NOT CONTRIBUTED GREATLY to the demand surge that has caused affordability in the capital cities to decline sharply over the last year or two."

We are arguing that population growth fuels housing inflation over the longer term and you 'refute' that with one quote from the report referring to "the last year or two"?

Of course, factors other than population growth helps to increase prices on occasions, including opening up Australian real estate market to the Internet, as I have acknowledged.

The other significant point you have refused to address is the cost to the environment and in terms of the destruction of natural capital of building the housing(http://forum.onlineopinion.com.au/thread.asp?article=4834#53620). Of course, if we completely disregard that, as many economists do, it will no doubt be possible to point to statistics which show the addition of more people magically creating more housing.

However, we cannot.

At the moment State governments are rightly resisting John Howard's call to simply release as much land as is necessary to meet the demand with all the environmental destruction that would entail.

I am sorry, but for now, I am unable to turn myself inside out trying to follow all the logic in the remainder of your arguments.

For a far more clear explanation of what has happened in the housing market in recent years, I again strongly recommend that they read for themselves Sheila Newman's submission and her thesis. Links to these documents can be found here:

http://www.candobetter.org/sheila

Col(http://forum.onlineopinion.com.au/thread.asp?article=4834#55769),

I think I have a good enough understanding of what an unhealthy economy dysfunctional economy is and that would be Australia at the moment based unsustainable on the pyramid selling scheme known as the 'property market' and the extraction and export of non-renewable greenhouse-inducing minerals.

Very little is manufactured here and an astoundingly high degree of economic activity concerns shuffling paper around. Of course those who benefit the most from this system at everyone else's expense will propagate myths to convince the rest of us that it is working in everybody's best interests, as you have done.

These myths include:

* That per capita GDP is measure of prosperity and hence a rise in the GDP value will necessarily increase our average prosperity.

* That housing is as affordable as it ever was -- peddled by yourself, the Commonwealth Bank and the AMP. (Refuted above with the help of Alun Breward (http://www.abc.net.au/rn/science/ockham/stories/s1335462.htm))

* That speculators play a vital and necessary role in our economy.

In regard to the last myth, I have already shown, that in regard to housing, speculation results in many being deprived of this basic necessity, or else being forced to pay excessively for it, whilst others, including yourself, it would appear from what you wrote, are enriched at their expense. Furthermore, we are supporting an unprecedented number of people who derive their income from unproductive work in this field.

As I pointed out above (http://forum.onlineopinion.com.au/thread.asp?article=4834#55287) the Housing Trust of South Australia provided good quality of affordable housing to all levels of South Australian society for decades and never cost taxpayers a cent. As a consequence the South Australian economy thrived for decades as funds were invested in manufacturing rather than in property.

You wrote: "No successful music CD was ever heard without the recording company publishing 16 failures."

This is abject nonsense to justify the copyright laws which deprive both artists and their audiences of the full benefits of computer technology for the benefit of the recording companies and people who work for them. This has been refuted comprehensively in this thread : http://forum.onlineopinion.com.au/thread.asp?article=141#16420

Foundation, you continue to fudge and you owe an apology to Dagget, whom you have been rude to, and to the whole forum for your time-wasting prevarications.

The set of figures you referred to was a TINY part of a citation that Newman quoted in her submission to the Housing affordability inquiry. The bulk of that citation was from a property marketer who freely admitted to profiting from forced population growth via massive immigration at the expense of the environment.

What you wrote next is actually important:

"With equilibrium in the TOTAL supply / demand, a localised surge of demand forcing up prices would be offset by an equal and opposite reaction (drop in demand) where they had come from. This boom has been so all encompassing as to prove this did not happen."

1. Equilibrium in TOTAL supply is the kind of managed world view that some foolish people actually believe could happen

2. None the less to work towards equilibrium of demand-supply in housing is highly desirable.

3. The boom has not been so all encompassing in every country as to cause the shortfall that Australia is experiencing

4. You can have no equilibrium if you constantly introduce new buyers with superior value currency from the outside and if you bring in new residents to the country who must find housing near work.

5. Point 4 describes how our system is manipulated.

6. My impression is that the only reason you would persist with your oblique and obfuscatory 'arguments' must be that you are in the game - vis: you derive benefit from this system and you don't want the greater bulk of the community, which pays for your profit in environment and social cost, to be able to read information about this. You must discredit at all cost broad research in favour of spin.

Kanga, responses in kind:

1. Equilibrium – Dagget claimed that even with an underlying supply/demand balance, intra-national (not inter-) migration was driving up demand and prices in some areas of AUSTRALIA. I pointed out that were this true there would be an equivalent drop in demand in other areas OF AUSTRALIA. This hasn’t happened. You missed the point.

2. Yes, “equilibrium of demand-supply in housing is highly desirable” and HAS BEEN ACHIEVED. I repeat, over the last decade, the supply of new dwellings (~1.8 million dwellings) has exceeded underlying demand from population growth (~2.2 million persons). This translates to an EXCESS of additional dwellings on a national scale. The latest census will show that household sizes have continued to fall, which is IMPOSSIBLE if we have a national shortfall of housing.

3. Irrelevant given previous indisputable FACT. The “shortfall” DOES NOT EXIST!

4. Irrelevant given my response to 2. BTW - Which countries have “superior value currency” and how many migrate to Aus per year? How much money do they bring and how much do they spend on houses? How does this compare to the 80 billion dollars of additional housing-secured debt due to be secured by Australian citizens against houses this year? Which is more significant, foreign capital flow through immigration, or massive, destabilising debt-capital injections funded by commercial banks with the blessing of the RBA? This is one of a dozen I’d happily discuss / argue about if you’d jump off the saddle of the anti-immigration horse for a couple of miles.

5. If this is “manipulation”, how do you describe a taxation system where ‘investors’ requiring only 2% capital appreciation per annum to profit, compete with home-owners requiring 8% annual capital appreciation? Oh I forgot, your barrow is anti-immigration. Other vastly more significant factors should be ignored. This is one of a dozen I’d happily discuss / argue about if you’d jump off the saddle of the anti-immigration horse for a couple of miles.

6. “Hello Kettle, this is pot.” No, I’m in no way involved in pro-immigration lobbying. Are you, perhaps acting and speaking from a background of vested interest? Are you personally involved in the ANTI-IMMIGRATION LOBBY? Yes, I have accidentally made money from real-estate, but am now selling my house (to rent) with every intention of buying something bigger, better and far cheaper after the crash (refer to my postings on propertyinvesting.com as a bear, and globalhousepricecrash.com for details). I haven’t provided any spin, just easily verifiable facts and figures from my own research, and critical comment on SPA’s document.

In fact, Dagget’s post (http://forum.onlineopinion.com.au/thread.asp?article=4834#55966), two up I agree with IN ENTIRETY. I don’t dispute the OUTCOMES of this boom, only the CAUSES. When you stop trying to spin your anti-immigration bias into the discussion perhaps we’ll have some constructive consideration of the REAL issues

Daggett “I have already shown, that in regard to housing, speculation results in many being deprived of this basic necessity,”

No you have not. The investors in housing, trading on negative gearing provide houses at a rental cost below that needed to support the building of then property, hence the “negative gearing effect” is seen where the rent (the cost to the tenant) – represents about 60% the cost of finance, before maintenance etc. (ie a $200,000 home will rent for about $800 / month but the mortgage payments would be around $1400 / month). I fail to see how a tenant is “deprived” by “renting” something which would cost them more to buy.

You have waded out beyond your depth Daggett and will now proclaim some omnipotent authority with which to denounce the realities of life – number one being, individuals will do what individuals want and will no longer kowtow to the dictates of feeble minded socialists.

As for your “hissing fit” regarding copyright laws, those laws protect the artist to income from the duplication of their art. It is obvious, your shallowness is not limited to matter economic but pervade just about every other topic on which you make proclamation.

I will happily continue to follow commonsense and accepted wisdom. I will challenge you with words of reason and insight and pull down your myths and straw houses.

Foundation,

Even if I were to except your arguments, which I don't, they fail to acknowledge the physical limits of the earth and of this country that I pointed out earlier. The water shortages, the loss of arable land and the silting up of Moreton Bay are only a few examples of how the provision of housing is made at a terrible cost to the health of our environment. The destruction now being caused to our land, water and marine resources alone is commensurate with that of previous failed civilizations, and that is without even considering the consumption of non-renewable fossil fuels and mineral resources that are necessary to maintain the current frenetic pace of covering our land surface with concrete, asphalt, bricks and tiles.

I should derive some satisfaction from the fact that you support my arguments against the exploitative nature of the private housing market, however, if we fail to care for our environment and fail to keep our population levels within the carrying capacity of this continent then it may prove impossible to prevent the collapse of our society, let alone be able to construct a decent compassionate society here.

---

Col Rouge,

I note that you have again avoided responding to my point about public housing in general and the HTSA in particular which never cost taxpayers a cent. I would suggest that this, in conjunction with a lot of what even you, yourself, have written is very strong evidence that publicly housing is vastly cheaper than private housing.

Your latest post appears to contradict your earlier posts which argued that housing was as affordable now as it was back in the 1970's. It is because of property speculation in conjuction with, as I have argued, population growth, that housing prices have reached the levels where those who have purchased the rental properties after others have made windfall speculative gains find it hard to get a decent return without special tax breaks.

However those landlords who bought their properties before the housing hyper-inflation of recent years would be doing very well indeed.

I note that the immigration ideologue, Foundation Garment, stuck for a decent argument, is once again resorting to ad hominem with low and unfounded accusations that Daggett is "anti-immigrant".

Whilst waiting (doubtless interminably) for an apology from Foundation, I advise forum readers to go to the submission to the Housing Affordabilty Inquiry of R. Keane, without further ado, at

http://www.pc.gov.au/inquiry/housing/subs/subdr232.rtf

if they want to see the case for using figures other than annual population growth to establish that the turnover generated by immigration has been increasingly important over the past decade. Keane corrects the Productivity Commission on the sources it had used on immigration numbers for the Housing Affordability Inquiry, and the Commission acknowledges their fault, but make the excuse that they cannot get the figures. How pathetic! How incompetent!

Kanga salutes you, Dashing Daggett, knight of astute argument.

"Kanga solutes you etc, etc..."

Of course you do. You're both on not simply the same side, but the same team. Kanga, how about admitting that this submission (the SPA one) that you've been gloating over and holding high as definitive proof that immigration is the primary cause of housing innaffordability….

… WAS IN FACT WRITTEN BY YOU!

If these type of underhand, manipulations are representative (as they appear to be) of the standard of intellectual debate available on "Australia's e-journal of social and political debate", I may have to move permanently to Club Troppo.

Foundation,

If what you allege about Kanga is untrue, then you have paid him/her a complement. I wish, for may part, I could claim credit for having written the submission to the housing affordability Inquiry and the Masters Thesis, both downloadable from http://www.candobetter.org/sheila.

Regardless, non-one is obliged to forgo anonymity in order to participate in these forums. Whether Kanga chooses to confirm or deny your allegation has no bearing on the discussion the substance of most of which you have either avoided or have attempted to obfuscate.

Whilst it's possible with selective data to 'prove' that the supply of shelter in some locations has matched the increase in population over some limited periods of our recent history, you have steadfastly refused to dispute the evidence that population increases have driven up the value of land, most particularly land in all the desirable locations that were affordable to nearly everyone little more than a generation ago.

Where some in our community have more housing space than before, it is most likely located a very long way from work, public transport and other amenities. Most of us who live anywhere near where we would choose to are often unable to afford any better than a single room in a share house. A single unit would be beyond my own means. Too bad if any of the other co-tenants is incompatible.

You have not responded to the evidence I have presented :

http://forum.onlineopinion.com.au/thread.asp?article=4834#53620
http://forum.onlineopinion.com.au/thread.asp?article=4834#54932
http://forum.onlineopinion.com.au/thread.asp?article=4834#55167
http://forum.onlineopinion.com.au/thread.asp?article=4834#55560
http://forum.onlineopinion.com.au/thread.asp?article=4834#55948
http://forum.onlineopinion.com.au/thread.asp?article=4834#56337

... that the increase in population has degraded our quality of life and will continue to do so, and that provision of housing for the greatly accelerated numbers of new arrivals adds to the destruction of our environment and draws unacceptably on the natural resources of this country, in particular water, for the provision of which rural communities in Queensland are to be destroyed (see http://www.savethemaryriver.com and http://www.stopthewyaralongdam.org).

If the provision of 'affordable' concrete shoeboxes, bereft of outside gardens(http://forum.onlineopinion.com.au/thread.asp?article=4834#53620), is ever again achieved, it will be at an unacceptable price to our environment and to future generations if population growth is not curbed.

Daggett, of course you would commend Kanga/Sheila. I'd be very surprised if the two of you candobetter/SPA goons did not know eachother's nicknames, especially as you so often coincidentally post immediately after eachother, always supportively.

Kanga already chose to forego anonymity here:

http://forum.onlineopinion.com.au/thread.asp?article=4452#41358

when she used this signiture at the bottom of her post:

Sheila Newman
smnaesp@alphalink.com.au

- - - - -

As regards your bevy of "evidence" that "that the increase in population has degraded our quality of life and will continue to do so," etcetera etcetera, blather blather... This has NOTHING to do with the subject! Therefore I will continue to ignore it... almost.

Are you saying that you (and perhaps SPA) are AGAINST cheaper housing, just on the off chance that some of the priced-out generation might take the chance to add to urban sprawl?

- - - - -

The truth is, if the Reserve Bank of Australia had shut off the money-supply spigot 6 years ago, rather than letting it flow at up to 5* the rate of GDP growth (guaranteed to create inflation / destroy the value of money), then we wouldn't be arguing. There wouldn't have been debt available to fruitlessly bid up the price of houses. There wouldn't have been the debt available to allow the recent rampant urban sprawl. We'd both be happy, no? I suspect not. I suspect you would still oppose the current level of immigration.

In this one paragraph, I have shown that population growth is insignificant. If my spoken suspicion is correct, it also shows that certain people are simply abusing other issues to wedge support for their unrelated cause.

Foundation,

You are ignoring why the prices of houses are being bid up. A lot of the people buying them are investors, not people who want to live in them themselves. Obviously if demand weren't increasing, as in say a German city where the population is stable or declining, then building additional rental properties would just lead to vacancies and reduced returns.

It is true that building costs have not increased in real terms over the past 30 years and that Australia has a lot of land. Land is no use to people for housing, though, if it doesn't have a reliable water supply, and for most people it is of no use if it isn't near jobs. The politicians have seen to it that the jobs are concentrated in a few big cities. This is underscored by the fact that unemployed people have been having their benefits cut off if they left those cities. There is only so much land within reasonable commuting distance of a city, so supply is restricted. Anything that drives up demand will then increase prices. This can be a trend to smaller households, people moving from the country to the city in search of jobs, or (surprise!) population growth, half of which is now due to immigration.

Why are you surprised that most people don't like being jammed together, owing their souls to keep a roof over their heads, seeing resources needed to meet the needs of existing populations channeled into growth infrastructure, or endless petty restrictions on what they can say or do? Perhaps others would like that idyllic small town lifestyle you describe for yourself on another thread.

Foundation,

Your resort to personal abuse by referring to myself and to Kanga as "SPA/candobetter goons" betrays a desperation on your part to avoid discussion of the substance of the issues at hand.

I am not surprised that you have been able to follow links I have made available to yourself and to others on this forum and to scan through the listed contributions of other contributors in order to discover seeming evidence of links between Kanga and myself and Kanga and Sheila Newman. However, they are irrelevant to the issue at hand.

Your argument that the cost to the environment of should not be considered when discussing housing affordability stems from schools of economics on both the left and right that see economics as separate from our life support system, rather than as subordinate to it.

I will leave it to others to see for themselves the stupity of such world views.

BTW, the web site http://www.candobetter.org was originally set up by myself as a personal initiative to do something about the terrible looming global environmental threats, the parlous state of democracy and generaly abysmal level of political discourse in this country. It is not officially linked with Sustainable Population Australia.

Daggett “However those landlords who bought their properties before the housing hyper-inflation of recent years would be doing very well indeed.”

This supposed “hyperinflation” was a direct consequence of reducing interest rates, wherein “affordability” being a constant, remainded the same and prices rose as interest rates (the cost of borrowing) declined.

I bought my house in 1996 about 3 weeks before the ARB started the drop in interest rates from 12%+ to about 5% in a few months. It was no speculators secret, it was plain and simple to see what wqas going to happen.

House prices have declined in most capital cities from a peak in 2003/04 since the recent interest rate increases. I still suggest affordability is a constant, the movement in house prices representing a negative correlation to interest rates (but the full effect distorted by the progressive increase in average weekly earnings – which contributes directly to disposable income)

We could probably get an 85% accurate model of future house prices simply by modeling

Average weekly earnings – after tax (disposable income)
RBA Interest rates
Allowance for net Immigration influences (demand accelerant) – by region and not simply nationally.
Index of Consumer confidence (another demand factor)
Unemployment rates (higher unemployment removes buyer demand from the market)
State government land hoarding policy (significant supply effect).
Government of the day (everything is more miserable under labor).

Actually – I might build such a model – I am sure I could sell such a thing and then afford to invest in a nice “McMansion”.

Oh, “candobetter” I suggest you rename it “tryhardernexttime”

Foundation should focus on the argument.

Daggett earlier clearly showed how the cost of housing relies mainly on the cost of land and that the cost of land relies on scarcity (induced and actual). He pointed out that immigrants do not bring land, water and other natural resources with them. This is why population growth is a problem that won't go away and why it is intimately related to the problem of unaffordable housing.

The Development lobby is organised to orchestrate demand and cause bottlenecks and then to manipulate the government via the media and pressure groups to 'release' more land, even though we should conserve land and other resources 'for future generations' and in order not to exacerbate carbon emissions (big percentage of carbon is contained in soil and plants).

When uncleared land is brought into use for housing or the related economic expansion which our kind of high energy and materials consuming society (mainly composed of employees rather than of self-sufficient land-users) requires, the animal and vegetable occupants of that land die of thirst and hunger - just to fatten the wallets of those on the top of the growth pyramid with high stakes in the finance, energy, property and materials industries.

Nothing here questions the potential economic and human value of individual immigrants anymore than it focuses on the potential economic and human value of individual babies born.

Neither immigrants nor children born here bring land with them, but a sane society guarantees, through sensible land-use and inheritance laws (land-tenure systems) that no child will be born without a natural entitlement to biophysical resources of land, water etc.

High immigration is targeted by people who are concerned about lessening quality of life and overshoot of resources because without high immigration the population would gently peak and then reduce about half-way into this century.

With high immigration we are on course to increase Australia's population by about 50% in around 30 years. With actual crises in supply of water and soil and signs of impending petroleum depletion anyone well-informed should be frightened.

So, Kanga and daggett, is it true that you are Sheila Newman and James Sinnamon respectively? Co-contributors to James' candobetter blog?

If so, your use on this thread of Sheila's work as apparent independent support of your position is, to say the least, deceptive.

There is absolutely nothing wrong in saying stuff like "as I stated in my masters thesis back in 2002..." or "as Sheila, my fellow-contributor to candobetter, said in her 2002 Master's thesis on this topic..."

But to pretend that you are citing the piece as authoritative third-party substantiation is, quite frankly, a little weird.

Looking back, Kanga's first salvo aimed at my "why France" observation is little short of dishonest, if in fact Kanga=Sheila.

>>Sounds like Pericles, unable to come up with specific criticism, is blustering to cover the fact that the material presented by S.Newman is so far beyond the usual fudge that passes for research in housing that he is totally out of his depth.

If this is Pericles’ standard of critical review, then Ms Newman has little to fear.<<

Why the third person usage? And what price the self-praise in the "material presented by S.Newman is so far beyond the usual fudge that passes for research" claim?

There is no shame in being anonymous - as I myself prefer to remain - but to pretend that the material you reference is independent of your own view is not a good look.

Who is Kanga?

Kanga
Description: A mother kangaroo, about 30 inches tall.
More Description: Kangaroos are generally regarded as one of the Fiercer Animals. A "Strange Animal".
Even More Description: Carries her family about with her in her pocket. The fastest animal in the Woods.
Address: 100 Aker Wood North
Son: Roo
Favorite Things to Do: Motherly things.
What She Does Every Tuesday: Goes to Pooh's house to teach Pooh how to jump.

Kanga IS a pretty extraordinary animal. If she isn't already writing under the pseudonym of S.Newman, I am sure that she could - and she would probably get a lot more attention, seeing as roos so rarely actually write about land-use planning.

I believe this whole posting thing started out by accident when roo, writing as Daggett, persuaded his mother to help him out on some technical details which he said were for a school project.

Signed by Eeyore on behalf of the Animals in the Forest since no-one dares tell Kanga that this is really not about a school project.

See http://www.lavasurfer.com/pooh-guide_highclassics.html for a portrait of Kanga. Perhaps Pericles, Col Rouge, Daggett and Foundation might like to meet and reveal who they are.

Kanga, I can only assume from your twee, but unconvincing, little post that you are embarrassed at your blatant self-promotion and devious behaviour, as you should be.

And anyone who thinks that Eeyore would be sufficiently motivated to write "on behalf of the Animals in the Forest" doesn't know much about Winnie-the-Pooh either.

"They haven't got Brains, any of them, only grey fluff that's blown into their heads by mistake, and They don't Think" [Eeyore]

Coo-ee Pericles!

Just hopped over from the back paddock and noticed you were waving at me.

You seem to forget that this is an anonymous forum which allocates pen-names to all members, presumably so as to allow greater freedom of debate. I am no more at liberty to reveal my true identity than that dentist who speaks on behalf of a plaque-combating toothpaste.

By the way, is it true that you are really Andrew Bartlett posing as a famous Greek statesman, whilst clutching at straw-men for the sake of staying in a discussion where you have used up all your intellectual ammunition?

The only reason Kanga would have to be ‘embarrassed’ at promoting Sheila Newman’s work would be if it were as manifestly inadequate as the ‘grey fluff’ that is constantly incestuously promoted by the property development, finance and housing industries and their accomplice ‘think’-tanks, advertising agents, elected stooges and corporate mates.

With regard to the – entirely unjustified - criticism of the concept of self promotion, I can only say that even the honourable Malcolm Turnbull has needed to respond to similar envious jibes, where it has been inferred that Wizard Home Loans are promoting Malcolm and Malcolm is promoting Wizard and even that Malcolm may intend to promote such loans through Malcolm’s new fund management company: http://www.abc.net.au/pm/content/2003/s892544.htm

Of course Newman’s work, which does not propose wealth transfers to benefit investors, would not attract the interest of finance companies. Her straight-talking similarly would not attract government grants or corporate scholarships. Maybe only a mother Kangaroo and a bellicose Beaver could be expected to take her side.

And yet, the tiny efforts of those humble glove-puppet champions draw a disproportionate number of slings and arrows, like Robin Hood and King John or David and Goliath.

What strange claim, Kanga.

>>I am no more at liberty to reveal my true identity than that dentist who speaks on behalf of a plaque-combating toothpaste<<

Of course you are at liberty to do so, Kanga. Unlike the "dentist", who is prevented from doing so by his profession's code of ethics.

You are however not obliged to, which is an entirely different concept.

>>The only reason Kanga would have to be ‘embarrassed’ at promoting Sheila Newman’s work would be if it were as manifestly inadequate...<<

I don't agree.

For one thing, your assessment of its adequacy is coloured by the fact you wrote it in the first place. For another, pretending to be a disinterested observer in an attempt to boost its credibility is - to say the very least - extremely tacky.

I think it speaks volumes about your character that you do not see this.

And if you are going to use the defence "well, Malcolm Turnbull does it", all you have achieved is to place yourself at his level.

I'm not sure that does a great deal for your argument.

In much the same way, you have managed to equate your work with the "‘grey fluff’ that is constantly incestuously promoted by the property development, finance and housing industries and their accomplice ‘think’-tanks, advertising agents, elected stooges and corporate mates."

If that was your objective, you have succeeded brilliantly.

>>And yet, the tiny efforts of those humble glove-puppet champions...<<

Is that how you see yourself? Good grief.

Have a great day.

Pericles,

Whether you are Kim Jong Il and whether Kanga is Meg Lees and whether I am really Campbell Newman is worse than irrelevant if we have nothing useful to contribute on the problem of affordable housing.

Not to have an argument is bad enough, but to have no sense of the absurdity of your focus on identities whilst you continue to masquerade as Pericles indicates a lack of the intelligence and the sense of humour that makes debate socially and intellectually rewarding

Daggett, I'm sure that little bit of late night venom made you feel righteous and worthy, but the fact remains that the standard of argument put forward by yourself and Kanga falls far short of convincing.

>>Not to have an argument is bad enough, but to have no sense of the absurdity of your focus on identities whilst you continue to masquerade as Pericles indicates a lack of the intelligence and the sense of humour that makes debate socially and intellectually rewarding<<

Let's examine this "absurdity" for a moment.

I pointed out that Newman's thesis was based upon an unrealistic set of comparisons. I laid out my argument for this, which has yet to be properly answered - simply referring back to the flawed text concerned is not, in my view, sufficient.

At this point it appeared that a contributor who protested my argument is, prima facie, the author of the text in question - a position that has also yet to be denied. It is therefore perfectly reasonable to describe that contributor's support as being also flawed, and to bring into question the ethics behind such actions.

Debate is "socially and intellectually rewarding" when it pays at least passing acknowledgement of some basic rules. One of these is that it is perfectly permissible, in the search for meaning within a text, to question the premises upon which it is based.

Another of those rules is that simply rep[eating something at great length is no more convincing than saying it once, and eventually detracts from the force of the original point.

Yet another of those rules is that the standing of the commentators can also be relevant, especially if they simply stand around saying "she's right, you know", when a more honest approach would be "I'm right, you know."

And who is Campbell Newman?

Pericles,

You wrote: "I pointed out that Newman's thesis was based upon an unrealistic set of comparisons."

You have done nothing of the sort!

Both France and Australia are advanced industrialised societies, both have people who need housing. They have roughly comparable populations and comparable amounts of fertile arable land as distinct from say, China, Uganda or Indonesia.

You have yet to answer the simple questions I put to you above (http://forum.onlineopinion.com.au/thread.asp?article=4834#55660), including :

"If you dispute that France or any one of these countries make valid comparators, then what comparators would you suggest?"

So, as far as I am concerned, my conclusion still stands:

"Your seeming attempts to mislead and to to divert the discussion away from the substance of (the discussion)to side issues, can lead me to no conclusion other than that you have no wish to seriously discuss these issues.

"Rather, it seems that you intend to misuse your voice on this forum to prevent people understanding the evidence which shows that population growth leads to the increase in the price of land and that is why property speculators have lobbied fiercely in favour of it, without any regard to the welfare of those already living in this country, our environment or our long term sustainability."

Clearly, until things change, any further discussion with you on this issue is a waste of time.

I would encourage others to read for themselves the evidence contained in the contributions made by those of us who have tried to point out the negative correlation between housing affordability on the one hand, and population size, globalisation and the increasing use of the Internet by property speculators on the other, and judge for themselves.

I would urge them not to be sidetracked by irrelevant concerns such as your personal attacks against Kanga and myself, and by your subjective judgement of the quality of Newman's Master's thesis and submission (downloadable from http://www.candobetter.org/sheila).

See http://www.notunnels.org about Campbell Newman, Lord Mayor of Brisbane who is building extravagently priced tunnels as a 'solution' to the traffic congestion caused by the population growth he is actively encouraging.

Daggett, you are a past master at missing the point.

My question, "why France?"

>>Both France and Australia are advanced industrialised societies, both have people who need housing. They have roughly comparable populations and comparable amounts of fertile arable land as distinct from say, China, Uganda or Indonesia.<<

There are a number of other "advanced industrialised societies", so that doesn't qualify.

Every country has "people who need housing", so that isn't a differentiator.

France has three times the population of Australia. How can that be termed "roughly comparable"? Is eating one Big Mac for lunch "roughly comparable" to eating three of them? Are the problems of a city with twelve million people, say Beijing, "roughly comparable" to one of four million, such as Sydney. Or Abidjan.

France has around 180,000 sq km of arable land, Australia has close to 500,000. "Roughly comparable"?

Only on the level of the most gross generalization can you show any comparability between the two countries, which leaves the impression that it was chosen to illustrate the point the author wanted to make, as opposed to having sufficient baseline similarities to make the comparison meaningful.

>>"If you dispute that France or any one of these countries make valid comparators, then what comparators would you suggest?"<<

With the greatest respect, it is not up to me to make alternative suggestions.

Where I come from, if I were to claim that the world is riding on the back of a giant turtle called the Great A'Tuin, I would expect you to ask for some evidence.

It would not be acceptable justification for me to say "because a tortoise wouldn't be strong enough".

And if you raised an objection to my theory, it would certainly not be appropriate for me to respond "if it isn't a turtle, what animal do you suggest it is?".

And as far as "personal attacks against Kanga and myself" are concerned, I encourage you to check your own - and her - previous posts for their sobriety and politeness.

Pericles, you wrote: "it is not up to me to make alternative suggestions."

Of course not!

My apologies for not allowing you to go on knocking the ideas of others, without putting forward any of your own.

Sheila Newman should have realized that the fact that throughout nearly all of the post-war period France was able to keep the cost of decent affordable housing well within the means of all of its citizens, whilst Australia has manifestly failed to do the same, was of no interest to Australians and she should not have tried to confuse the picture that the property developers and land speculators were attempting to present to the Housing affordability enquiry.

And please don’t, on my account, take your head out of the sand in regards to the population driven water crisis that has now gripped Victoria as well as New South Wales, Queensland, and West Australia.

daggett, was that..... sarcasm?

Ooooh. I'm so hurt.

Your continued bluster only underlines the fatuity of your position. If you had anything constructive to offer, you probably would have stumbled across it by now.

The logic behind your insistence that it is somehow my task to come up with alternatives to Ms Newman's selection of France as a useful comparison to Australia defies analysis.

daggett: France and Australia are sufficiently similar for them to be used side-by-side in Ms Newman's thesis on housing affordability.

Pericles: No they are not. They are very different. Demographically, historically, industrially.

daggett: OK smartyboots, so what would you propose as a valid alternative?

Do you not see the problem I have with that position?

Pericles,

Your last post is yet one more of many similarly lame attempts to distract the attention away from the lack of substance in your own contributions.

I have suggested that given the costly, inefficient and iniquitous shambles that the privatised housing market has become since Menzies commenced the process of privatisation that we are entitled to ask whether we could have done any better. If other countries such as France and other European countries have managed to do a vastly better job with housing than Australia has been able to do, then we should seriously consider adopting their policies, rather than persevere with what has demonstrably failed so abysmally in this country.

You demand that we exclude that possibility altogether until we find another positive example that much more exactly matches that of Australia in terms of arable land mass population and demographics than that of France.

Once again, I leave it to others to decide which of these two approaches is the more reasonable and adds anything of value to the discussion. Again I invite others to read the contributions of myself, Kanga and others who have raised the connection between population and housing affordability, as well as the abovementioned thesis and submission downloadable from http://www.candobetter.org/sheila and compare them with yours and to decide for themselves which side is trying to address the substance of this issue.

I would also urge others to re-read Andrew Bartlett's original article to which you also take exception. In spite of its failure to address the issue of population, it still contains a lot of very worthwhile ideas.

daggett, you seem to start always from the assumption that your observations are, by definition, true. Unfortunately, most of those observations fall into the category of your individual opinion, which - I have to point out - should also be open to question.

>>...the costly, inefficient and iniquitous shambles that the privatised housing market has become since Menzies commenced the process of privatisation<<

...is, I have to say, a value judgement that you may share with a number of your friends and co-academics, but is not what may be termed a fact.

Many people have, you may be surprised to hear, actually been able to buy a home "since Menzies commenced the process of privatisation", and - shock, horror - continue to do so today. The "crisis in housing affordability" that started this thread is no more than a reflection of basic capitalist economics, and will soon become just another short term blip on the graph.

And your characterisation of my position on "why France?" is becoming very tedious.

>>You demand that we exclude that possibility altogether until we find another positive example that much more exactly matches that of Australia<<

You know perfectly well that I do no such thing. I asked a simple question, intended to provide illumination to an otherwise obscure comparison, and suddenly find myself being told that I am "demanding" information from you. You may be able to get away with that kind of bluster at Ms Newman's university, but it means jack to me.

Either France is a relevant comparison or it is not. You have so far made not one single attempt to justify her position, merely referred me to the offending document, without being able to find one shred of supporting argument that can withstand scrutiny.

And somehow you want me to believe this is my problem?

I notice that you couldn't resist the temptation to promote Ms Newman's "paper" once more. I am sure that those who accept the challenge will find it provides no more insight into the real issue than does our meaningless little interchange here.

Pericles wrote: "The 'crisis in housing affordability' ... will soon become just another short term blip on the graph."

Of course it will!

No-one should think that just because the REIQ expects average housing prices in South East Queensland to go from $365,000 to $800,000 (http://forum.onlineopinion.com.au/thread.asp?article=4834#53620) in the next ten years that housing will become any less affordable, particularly to those earning the minimum wage.

No doubt Howard's 'Work Choices' legislation will make ordinary Australians so prosperous that they will easily be able to afford $800,000. And with home theatres to look forward to, they will hardly miss back yards, gardens, trees, parks or bushland.

Pericles wrote: "I notice that you couldn't resist the temptation to promote Ms Newman's 'paper' once more."

Would you have preferred that I had, instead, promoted your own scholarly works on the subject? Please let me know which submission to the Housing affordability Inquiry you wrote on behalf of land speculators or property developers and I will be happy to give it equal space with Sheila Newman's thesis and submission (downloadable from http://www.candobetter.org/sheila) from now on in this thread.

daggett, we can all speculate about what might be:

>>the REIQ expects average housing prices in South East Queensland to go from $365,000 to $800,000... in the next ten years<<

Just for the record, that is an increase of just over 9.1%p.a., or about the same rate as China's GDP.

http://www.chinadaily.com.cn/china/2006-05/10/content_586537.htm

The real question of course is whether houses will be more or less affordable at the end of this particular growth spurt.

It may be the case - we are talking about the future, so at this moment I am as "right" as you are daggett - that the SEQ economy will grow at this rate too.

Especially if it is fuelled by all those new and active workers flooding in to take advantage of Beattie's economic miracle.

Let us also speculate for a moment whether houses in China will be more, or less "affordable" at the end of their particular growth experience. Do you think it is likely that in ten years time there will be a) more b) the same number or c) fewer Chinese able to afford their own home?

>>Please let me know which submission to the Housing affordability Inquiry you wrote on behalf of land speculators or property developers and I will be happy to give it equal space with Sheila Newman's thesis<<

If I do write one, I shall make sure it compares our housing situation with places such as Rio, Maui, St Petersburg, Vienna and Rome.

Not because they can shed any light on the issue, but because hey, they are great places to visit. I can always find the odd comparison to validate the choices. They all have people who need housing. They all have governments. They all are therefore "roughly comparable".

N'est-ce pas?

Pericles,

Once again:

The reasons for using France as a comparator was given by Sheila Newman in the abstract (http://www.candobetter.org/sheila/thesisAbstract.html) to her thesis and in greater detail in Chapter 1 and in the submission. As I have put in my own words on more than one occasion: "The reason for using France as a comparator should be obvious, and in any case is explained in Chapter 1 of the thesis. Clearly this country's housing policies have not worked in recent years as we now have the world's least affordable housing. Surely it is of interest to see whether we can do better by comparing Australia with another country which has, at least until very recently managed to provide all of its citizens with affordable good quality housing." (http://forum.onlineopinion.com.au/thread.asp?article=4834#55100)

The fact that you don't accept this explanation or are incapable of understanding it does not give you the write to mislead others, for example, by writing: "... You have so far made not one single attempt to justify her position ..."

As the preceding statement shows, the above statement is a lie, and as I have shown (http://forum.onlineopinion.com.au/thread.asp?article=4834#55524), by no means your first attempt to mislead in Online Opinion discussions.

Pericles wrote: (http://forum.onlineopinion.com.au/thread.asp?article=4834#58869): "... that kind of bluster ... means jack to me."

I don't particularly care what you think. You have already demonstrated amply that your mind is completely closed on this issue and you are not interested in considering any evidence which conflicts with your current views. As I wrote in an earlier post (http://forum.onlineopinion.com.au/thread.asp?article=4834#58830): "I leave it to others to decide which of these two approaches is the more reasonable and adds anything of value to the discussion."

daggett, it puzzles me that you are unable to see that this is heading nowhere, and that you are simply repeating the non-statements you made earlier.

I have already made it clear that your assertion that "[t]he reason for using France as a comparator should be obvious, and in any case is explained in Chapter 1 of the thesis" does not wash with me.

a) it is far from obvious, as I have pointed out on numerous occasions.

b) it is not explained in chapter 1, or indeed anywhere, in Ms Newman's thesis. Further, you have had any number of opportunities to point out what this explanation consists of, and are for some reason unwilling to do so.

You also fail to justify or support with evidence your other dramatic claims:

"Clearly this country's housing policies have not worked in recent years as we now have the world's least affordable housing"

It may indeed be your personal opinion, which is fine, but surely you can only welcome an opportunity to add some substance to such a wide-ranging - and significant - claim?

You go on to assert, somewhat aggressively:

"You have already demonstrated amply that your mind is completely closed on this issue and you are not interested in considering any evidence which conflicts with your current views"

It probably hasn't occurred to you, but the only reason I am still asking these questions is because my mind is not closed on the subject, but instead is waiting upon you to provide some support for your many assertions.

I can't keep on giving you these opportunities to present your evidence, there are only so many hours in a day, and days in a year.

Pericles,

Yet again, I have shown your tediously repeated claim, that I have not provided an answer to your question "Why France?", is a lie.

Whether or not my answers 'wash' with you or whether or not you understand or accept them is not germane to my point about the intellectual dishonesty that you have engaged in from the outset of your participation in this debate.

Even a moron should be able to understand that if one country (i.e. France or any one of a number of the other of the above-mentioned European countries) has managed to keep decent housing affordable to all of its citizens whilst Australia has failed to do the same, then that fact should be very relevant to any inquiry into housing affordability in Australia.

If, to the contrary, you still maintain that it is not worthwhile to look outside of Australia to see how other countries, such as France provide their citizens with housing, that's fine, but a lot of other people do, and I don't see what right you have to demand of me that I spend any more time than I already have explaining what is obvious and clear to me and to most other participants in this forum.

Pericles wrote: "I can't keep on giving you these opportunities to present your evidence, there are only so many hours in a day, and days in a year."

That's an enormous relief to me. Please don't trouble yourself any more on my account in giving me these 'opportunities'. I, for one, would be enormously grateful.

Your wish is my command, daggett.

I shall let the matter of the unsubstantiated comparisons in Ms Newman's thesis rest, and give you the opportunity to move on to more important topics.

However, just for form's sake I should point out that your calling my complaint that the "why France" question went unanswered "a lie", is itself false. As anybody who troubles to read the thread (which is, I suggest, limited to the two of us) can easily see.

It surely is not difficult to select the paragraphs that make this point from the thesis, and finally put my mind to rest. The fact that you did not, suggests that you cannot.

'Bye for now.

Pericles wrote: "I shall let the matter of the unsubstantiated comparisons in Ms Newman's thesis rest, ...".

Again, Sheila Newman's submission to the Housing Affordability Inquiry shows that France and other European countries have been able to keep the price of housing affordable to all their citizens, whilst Australia has failed to do the same.

How is that 'unsubstantiated'?

Pericles wrote: "I should point out that your calling my complaint that the "why France" question went unanswered "a lie", is itself false."

Your 'question' was answered many times and has been answered again here, so you have lied and lied repeatedly on this matter.

Other disingenuous debating ploys employed by you include:

1. Untrue allegations that that the conclusions in Newman's submission and thesis were not substantiated (http://forum.onlineopinion.com.au/thread.asp?article=4834#54974)

2. A slur against Sheila Newman: "it was a prolonged boondoggle on other people's money".

3. Later that slur was turned around 180 degrees where you attempted attempt to mock Sheila Newman for her supposed folly in spending her own money on a project pronounced by yourself to have been a waste of time: "If, ... , Ms Newman was not paid for her endeavours, the question is even more important. So what was the rationale? Inquiring minds would dearly like to know."

4. Aspersions against Newman's writing style (http://forum.onlineopinion.com.au/thread.asp?article=4834#55054).

5. Slurs against the examiners of Newman's thesis: "... (her examiners) clearly didn't spend a great deal of time working out whether it made any sense. Quite possibly they were impressed by the sheer quantity of the references, and the fact that some were in a foreign language." (http://forum.onlineopinion.com.au/thread.asp?article=4834#55430)

Nowhere have you you paid Sheila Newman the courtesy of discussing the ideas contained in the documents you claim to have read.

Pericles wrote: "Your wish is my command, daggett.".

Let's hope you remain true to your word and take your trolling elsewhere, preferably well away from any discussions which involve people who acknowledge that there is something seriously wrong with Australia's housing market and who care enough to want to do something to fix it.

daggett, your logic continues to astound me.

>>Sheila Newman's submission to the Housing Affordability Inquiry shows that France and other European countries have been able to keep the price of housing affordable to all their citizens, whilst Australia has failed to do the same. How is that 'unsubstantiated'?<<

You introduce the conclusion as proof of the assumption, a form of conceit known as post hoc, ergo propter hoc.

To be able to agree or disagree with the conclusion requires both a common understanding of what "affordable" means, and a clear statement of the common ground that the countries share, that enables them to be validly compared.

There has to be some sound basis of commonality, otherwise the conclusion cannot be related to the arguments. Why do you resist this obvious fact?

Nowhere have you, or anybody else, been able to point to a valid reason why France was selected as the basis for comparison. Unless and until you do this, the comparison remains as unrelated as today's weather patterns in Paris and Sydney. There may be rain in both cities, or sun in one and rain in the other, but there is no plausible connection except that they are both countries that exist on this planet.

I will admit that I was at fault in assuming that - because of the lack of obvious connection - France had been chosen for its congeniality as a tourist destination. Once you explained that the thesis had not been funded in any way, I retracted my suggestion that it had been a boondoggle out of politeness to Ms Newman.

However, I stand by my assertions as to the lazy writing style - that sentence on wealth being moulded like clay is still my favourite.

>>Nowhere have you you paid Sheila Newman the courtesy of discussing the ideas contained in the documents you claim to have read.<<

Oh, I read it daggett, believe me I read it. And if there had been any ideas of any substance to discuss, I would have infinitely preferred to have done so.

Pericles,

Of course I knew that your promise to end your trolling on this thread was just too good to be true.

Let's recount the substance of your objection to Sheila Newman's submission an Masters thesis (downloadable from http://www.candobetter.org/sheila). You claim that because:

1. "(France) has 60 million people in a land mass of half a million square kilometers, we have 20 million in 7.6 million square kilometers.",

2. Paris is different from Sydney, and

3. That France suffered from destruction in the war whilst Australia did not (http://forum.onlineopinion.com.au/thread.asp?article=4834#55141)

... nothing of interest to people who wish to solve the housing affordability crisis can be learnt by examining how France managed to keep housing affordable to all its citizens whilst Australia did not.

(If that is not your position, then please don't feel constrained not to state what it is.)

In regard to population size and land mass, I hold that the differences are not so great when considering arable land mass. Whilst such a view can be regarded as subjective, it is no less subjective than your own.

However, it would almost certainly have not mattered which country Newman had chosen as other equally striking differences with nearly every other country on the planet could have been cited.

You acknowledged that many other countries have been able to keep housing more affordable than has Australia (http://forum.onlineopinion.com.au/thread.asp?article=4834#54974). Yet, when I asked which country you would consider more suitable, you refused to do so : "... it is not up to me to make alternative suggestions." (http://forum.onlineopinion.com.au/thread.asp?article=4834#58111)

Of course you are not obliged to put forward your own ideas and to take stances which you may then have to justify, but your refusal to nominate a more suitable 'comparator', makes it obvious that your objection to Sheila Newman's choice of France is as disingenuous as all of your other debating ploys.

Pericles wrote: "... if there had been any ideas of any substance (in the thesis) to discuss, I would have infinitely preferred to have done so."

No, you refuse to discuss the ideas because you have no answers to them.

Ah, but with respect daggett, it was you who reopened the discussion. I just knew you would feel the need to have the last word.

Which, regrettably, is just as incomprehensible as your first.

In your logic, because I asked "why France", it necessarily means that I believe "nothing of interest to people who wish to solve the housing affordability crisis can be learnt by examining how France managed to keep housing affordable to all its citizens whilst Australia did not."

I specifically did not draw that conclusion. For all I know, something of interest might well be learnt from France and its housing policies. But certainly not by pretending we share a common foundation, and using that to force-fit some pet theories.

>>In regard to population size and land mass, I hold that the differences are not so great when considering arable land mass.<<

Australia has nearly three times France's area of arable land. France has three times the population of Australia. How can these differences be "not so great"?

Also, where is the link between arable land, population distribution and housing strategies anyway? You can list as many "facts" as you like, but somewhere amongst them all has to be a connection. Without that connection, there cannot be a supportable conclusion.

Ultimately it comes down to this.

It is impossible to argue for or against something that makes no intrinsic sense.

So I chose to try to find out whether I was missing a linkage somewhere, some aspect of two apparently unrelated entities (France; Australia) that would enable the connections to be made, and the thesis to come into focus.

And only now, after all this correspondence, do you have the honesty to admit:

"...it would almost certainly have not mattered which country Newman had chosen ..."

So, if we rewind to my original question, "why France", we get a different - and far more credible - answer.

"No reason. Any country would have done just as well."

Altogether a pretty fair summing-up of the value of Ms Newman's thesis.

Pericles,

Any lingering doubt I may have had about your motivation for participating in this discussion has now been removed. Clearly you are bent, above all else, on discrediting and smearing those with whom you disagree, no matter how low you have to stoop and no matter how much of everyone's time you have to waste in order to achieve this.

How you imagined you could have ever gotten away with your wanton self-evident misrepresentation of my most recent post is beyond me. You wrote: "And only now, after all this correspondence, do you have the honesty to admit:

"'...it would almost certainly have not mattered which country Newman had chosen ...'

"So, if we rewind to my original question, 'why France', we get a different - and far more credible - answer. ..."

Then you put the following words into my mouth:

"... 'No reason. Any country would have done just as well.'"

This is an open and shut case of taking a statement out of context in order to deliberately misrepresent what was being said.

My actual words were: "However, it would almost certainly have not mattered which country Newman had chosen as other equally striking differences with nearly every other country on the planet could have been cited."

You know perfectly well that I never 'admitted' that it did not matter which country was used for the purposes of Sheila Newman's thesis. What I said was that given your objections to France being used as a 'comparator' I don't see how you could not have similarly objected to the use of any other country with similar immigration and housing polices.

I would suggest to you that if you finally did what you undertook to do three posts ago and made yourself permanently scarce from this thread, and preferably from Online Opinion altogether, you would be doing an enormous favour to the vast majority of those who use Online Opinion

Your concept of an "open and shut case" needs re-examining, daggett.

>>This is an open and shut case of taking a statement out of context in order to deliberately misrepresent what was being said<<

Compare and contrast your original long-winded:

>>it would almost certainly have not mattered which country Newman had chosen as other equally striking differences with nearly every other country on the planet could have been cited.<<

with my succinct precis:

>>'...it would almost certainly have not mattered which country Newman had chosen ...'<<

summarised as:

"Any country would have done just as well"

It takes a great deal of imagination to turn those into "wanton self-evident misrepresentation", but I guess that is your forte.

It has to be said daggett that your politician's trick of firstly failing to answer the question, then making an outrageous generalisation that is only obliquely relevant to the question, and following it up with some good old fashioned ad hominem insults is not only transparent, but very boring.

You invariably complement this tiresome mix with a hastily-drawn straw man, just for the sake of completeness:

>>What I said was that given your objections to France being used as a 'comparator' I don't see how you could not have similarly objected to the use of any other country with similar immigration and housing polices [sic].<<

Which of course, is a nonsense.

First of all it is not clear whether you mean "policies similar to France", or "policies similar to Australia"?

Then of course you have managed to ignore the fact that comparing policies should come at the end of the process, once the two baseline similarities have been sufficiently established.

N'est-ce pas?

Pericles,

Your hair-splitting and prevarication may serve your purpose of preventing some people from learning what is really happening in the Australian housing sector, but anyone who takes the time and effort to read this thread with an open and enquiring mind will be able to see your deceitful ploys for what they are.

My purpose, daggett?

>>Your hair-splitting and prevarication may serve your purpose of preventing some people from learning what is really happening in the Australian housing sector<<

I doubt that our little side discussion on the value of Ms Newman's thesis has had, or will have, an ounce of impact on the genuinely enquiring mind. And quite why you view its prevention as my "purpose" is beyond imagination.

What is "really happening" in the Australian housing sector is exactly what you would expect in a normal capitalist economy. People will spend their money on goods and services of their choice, and at the moment there is a feeling that in the booming economy that we have been experiencing recently - and which could reverse itself at any moment - property is an appropriate destination for a proportion of the wealth they feel they have.

I am aware that you favour a form of socialist housing (South Australia and all that), where the roof over the head has priority over lifestyle, but this is not everyone's preferred option. And while this is the case, market forces will dictate that an increasing percentage of our disposable income will feed the housing sector.

When you give people choice, and the means to exercise that choice, this is what happens. Only by restricting or taking away that choice, or making it unaffordable, will it change.

Affordability is, after all, exactly what it says: it is the state of being able to afford, in the sense of to buy, something. All around us, every day, houses are being bought. If houses were "less affordable", fewer people would be willing to buy them.

>>anyone who takes the time and effort to read this thread with an open and enquiring mind will be able to see your deceitful ploys for what they are<<

No ploy, daggett. Simply an attempt to keep the arguments rational.

Pericles,

It's interesting that six posts ago you complained "I can't keep on giving you these opportunities to present your evidence, there are only so many hours in a day, and days in a year." (http://forum.onlineopinion.com.au/thread.asp?article=4834#59016)

... and that five posts ago(http://forum.onlineopinion.com.au/thread.asp?article=4834#59082), you undertook to stop posting to this thread.

... and yet I find that you still persist in this discussion, which according to you, has not had "an ounce of impact on the genuinely enquiring mind."(http://forum.onlineopinion.com.au/thread.asp?article=4834#59635).

No doubt, if I don't let you have the last word, you will still be filling this thread with obfuscation, self-contradiction, deliberate misrepresentation (http://forum.onlineopinion.com.au/thread.asp?article=4834#59327), and long-winded obscure analogies which shed absolutely no light whatsoever on the subject at hand when Christmas 2007 arrives.

Glad that you have chosen to give over so much of your valuable time in order to "keep the argument rational".

Which all goes to show that Pericles's statements against Sheila Newman's work are no more defences for his non-existent argument than, for instance, are government statements justifying the culling of kangas on pseudo-demographic grounds.

Formulated, sprawling on a pin, pinned and wriggling on the wall, Pericles,
Yet,
Seeing that it was a soft October night, this fog of human letters came to rest,
Curled once about the house, and fell asleep.

yrs obscurely, as befits the narrowing, half-deserted streets of this tedious argument, to misquote TS Eliot.

Kanga
:-)

Oh dear, daggett, yet more attempts to paint yourself as somehow an injured party in this little storm in a teacup of ours.

Beneath all your huffing and puffing remains the fact that you have not, on one single occasion, shown the relevance of France to the (as you perceive it) horror of the Australian property market.

The closest you came to offering some supporting material was to refer me back to the document in question, then claim that this, somehow, proved the point.

If I were to write a paper on the shortcomings of the NSW rail system, and use the experience of the Paris Metro to support my views, would you or would you not regard this as "valid"?

There are about 10 million people in Paris and suburbs, about two and a half times as the population of Sydney.

Is this "roughly comparable" in your terms? It is, after all, "roughly" the same ratio as the difference between the populations of France and Australia, and (another of your questionable "similarities") that of each country's area of arable land.

If you were to complain at the irrelevance, would I be justified in asking you simply to read it again, as if repetition makes it suddenly right?

And once again, just to set the record, that you continually insist upon abusing, straight, the exact wording of my promise to end the discussion was

>>I shall let the matter of the unsubstantiated comparisons in Ms Newman's thesis rest, and give you the opportunity to move on to more important topics.<<

Since you chose not to move on, but continued your fantasy of trying to justify the unjustifyable, you gave me no alternative but to continue to defend myself against your aggressive imaginings.

And Kanga, I've no idea where this comes from:

>>Which all goes to show that Pericles's statements against Sheila Newman's work are no more defences for his non-existent argument than, for instance, are government statements justifying the culling of kangas on pseudo-demographic grounds<<

....but it is about as relevant as anything else you have written, so hey...

Pericles,

If you insist on taking us off on yet another tangent, I would have thought that Sydney's rail system could benefit a good deal from a study of Paris's highly efficient rail system, and, conversely, there would be many lessons of what not to do, from the destruction that successive NSW governments have inflicted upon Sydney's rail network.

I realise the difficulty that you have in grasping new concepts, but there happen to be many areas of scientific enquiry, where a difference by a factor of three is not regarded as significant. What can be regarded as significant is when the two entities being studied differ by one or more "orders of magnitude", meaning, roughly, by at least a factor of 10. Given that the cited differences are less than this, it is my subjective view, which is no less subjective than your own, that the differences do not prevent us from drawing useful lessons.

In fact your own views are not altogether consistent. On the one hand you say that the cited differences of population size and land mass preclude any meaningful comparisons being made between Australia and France, yet elsewhere you concede that they might not. Either they do or they don't, I would have thought.

In any case, if they do preclude meaning comparison, are you therefore saying that the differences you have cited will always ensure that housing in France will be more affordable than Australia, regardless of what polices the different Governments might adopt?

Of course, given your outright refusal to answer my previous question:

"If you dispute that France or any one of these countries make valid comparators, then what comparators would you suggest?"

... I won't hold my breath waiting for an answer to this one, let alone one which is comprehensible.

However, I do anticipate that you will, for your part, continue, until at least Christmas 2007, with your carping demand for a far more detailed answer, presumably from from first principles at the sub-atomic level, to your vague, unclear and open-ended question:

"Why France?"

daggett, you complain about...

>>...your carping demand for a far more detailed answer, presumably from from first principles at the sub-atomic level, to your vague, unclear and open-ended question: "Why France?"<<

You have managed to avoid offering an answer to this in so many different ways to date, but to suggest now that it is in some way deficient as a question is a masterstroke of obfuscation.

Vague? Unclear? How much more specific could it possibly be? 'Why' being simply an adverb meaning "for what purpose, reason, or cause; with what intention, justification, or motive", and France being the country chosen by Ms Newman as the baseline for comparing housing policies.

If you consider this simple question to be unclear, it is little wonder that you had so much difficulty responding to it.

But now you choose to, for some reason.

>>What can be regarded as significant is when the two entities being studied differ by one or more "orders of magnitude", meaning, roughly, by at least a factor of 10. Given that the cited differences are less than this, it is my subjective view, which is no less subjective than your own, that the differences do not prevent us from drawing useful lessons.<<

You propose that the statistical parameters of land area, population density, arable land etc. are within an order of magnitude of each other, and therefore consistent with the norms applied to research of this kind. Why has it taken so long to suggest this? It might have saved a lot of trouble.

Except....

Even though it is heavily qualified as being your subjective view, isn't a factor of ten in itself just a little difficult to fit under the heading of "comparable"? Can you suggest any other field of academic study where this magnitude of difference would be considered "roughly equivalent"?

(Correction: 'meaning' near the start of third paragraph in http://forum.onlineopinion.com.au/thread.asp?article=4834#59795 should have been 'meaningful')

Pericles,

Thank you for yet another of many posts which have so brilliantly illuminated the question of Australia's (non-existent) housing crisis and what to do about it. Other visitors to this thread will definitely be impressed by the wealth of facts to be gleaned from all of your clear, thoughtful and well-reasoned contributions as well as many highly relevant analogies. Please don't stop.

---

More seriously, Pericles, firstly I note that you have, typically and unsurprisingly, declined to answer the question I put to you in the previous post:

"... if they do preclude meaningful comparison, are you therefore saying that the differences you have cited will always ensure that housing in France will be more affordable than Australia, regardless of what polices the different Governments might adopt?"

Regarding orders of magnitude: Clearly the land mass sizes and population sizes are different in an obvious sense, but why should these differences necessarily prevent us from being able to draw useful lessons?

You wrote: "Vague? Unclear? How much more specific could it possibly be? 'Why' being simply an adverb meaning "for what purpose, reason, or cause; with what intention, justification, or motive'"

Already answered many times before starting from Kanga's response at http://forum.onlineopinion.com.au/thread.asp?article=4834#54903 and myself at http://forum.onlineopinion.com.au/thread.asp?article=4834#55100 :

"Clearly this country's housing policies have not worked ... Surely it is of interest to see whether we can do better by comparing Australia with another country which has, at least until very recently, managed to provide all of its citizens with affordable good quality housing."

Your statement that I have "avoid(ed) offering an answer to this" is therefore a lie and you are obviously nothing more than a time-wasting troll. So, who is paying you to do what you are doing in order to prevent others from learning from this thread?

If the lack of an answer you deem to be satisfactory prevents you from discussing the substance of the thesis (downloadable from http://www.candobetter.org/sheila), why can't you just move on and stop wasting everybody's time?

More facts about the effects of population growth on South East Queensland:

* 75 square kilometres of bushland and open space is being destroyed each year to accommodate new housing.

* 70% of SEQ forests has been cleared to date

* 46% of the vegetation along SEQ streams has been degraded

* The koala population has declined 47% in urban areas and 30% across the region. They are now listed as a 'vulnerable' species whereas they were previously listed as 'common' (see also http://www.candobetter.org/node/15)

* The Healthy Waterways report, (an independent scientific monitoring program) is showing that after seven years of monitoring, most of SEQ's waterways and Moreton Bay are either not improving or are on a downward spiral due to pollution and drought. The latter is a sign that the natural systems are no longer resilient enough to cope with the negative impacts created by SEQ population. In the Pumicestone Passage (Moreton Bay) bacteria analysis showed there was a 5 - 10% risk of swimmers experiencing gastrointestinal illness. Also, as I pointed out above(http://johnquiggin.com/index.php/archives/2005/11/25/peak-oil/#comment-37808) Moreton Bay is filling up with silt as a consequence of the frenetic land-clearing and building activity in SEQ.

Clearly, if we are somehow to make the supply of housing match the endlessly increasing demand as foundation has suggested we can(http://forum.onlineopinion.com.au/thread.asp?article=4834#55661), the environmental cost will almost certainly be too great. What happened to the soils and environents of many past civilisations, with far fewer means to destroy their natural environent (http://johnquiggin.com/index.php/archives/2005/11/25/peak-oil/#comment-37808), will almost certainly happen to our own, unless we act very quickly in order to change our direction.

In case anyone who has participated in this forum lives in Melbourne:

http://prosper.org.au/node/85

Housing Affordability Crisis
Wednesday November 8th, 6.30pm
Nothcote Town Hall, 189 High Street, Northcote

Political candidates for the Northern Metropolitan region have been invited to present their policies to the electorate. With the balance of power in the Legislative Council a noted point of interest in the 2006 Victorian State Election, voters in this locality could be pivotal to the election result.

We look forward to hearing first hand how the different candidates will address the Housing Affordability Crisis.

We ask - "Has the Great Australian Dream become a Fantasy?"

Earlier that day the Reserve Bank will announce its next interest rates decision.

An independent chairman will precede over a ballot to decide the speaking order. Each speaker will present for 15 minutes. Following this will be question time for the general public.

RSVP appreciated

If anyone still seriously maintains that immigration is not a factor which fuel housing inflation and is not, as a consequence, encouraged and welcomed by land speculators and property developers, they should check the sories in pratically every day's newspapers about gorowing housing unaffordability. Also check out these articles:

"Property prices tipped to soar" at http://www.realestate.com.au/review/apr072/prices_soar.html?from=review

"Michael Yardney - who runs buyers' advocacy service Metropole Property Investment Strategists -

"... said Australia was on the cusp of one last momentous real estate boom caused by strong immigration, a lack of land and an increasing proportion of single-person households. As the price climb continued, home ownership levels would also continue to fall, he said."

"Boom, migrant demand lift roof off home sales" at http://www.theage.com.au/news/business/boom-migrant-demand-lift-roof-off-home-sales/2007/06/09/1181089394431.html

"Scott Keck, managing director of property consultants Charter Keck Cramer, said part of the market's resurgence stemmed from immigration, with about 1000 people settling in Melbourne every week.

"'In the past two years, 80 per cent of migrant families coming to Melbourne have purchased their own home within 18 months of arriving,' he said."

Some of the comments made here are absolute BS. I am 25 too, I rent and it`s the worst it has been for decades.You are foolish to think " It`s never been easier to buy...." Nearly every house in perth is over 350000 dollars. And if you want a house in a good suburb your in the 600- 1.5 million dollar mark. When my dad bought built his first few houses in really nice southern suburbs of perth it cost him 250-250k on the block built. We young people don`t have half a million so we have to rent, and then when you rent a place out you get kicked out so the owner can sell his house and make a fortune. It`s so unfair, as a young guy that`s engaged i want some stability and if i have to move out every 6 months. Nothings getting done about it and quite frankly if they continue to do nothing whilst cutting off welfare benifets, you just watch all us young people, homeless out on the street and living in cars, while all the baby boomers sit back in there million dollar houses in the best suburbs knowing they paid 80 grand to buy it 10 years back, and then they rent out there 2nd "investment house" out for 500 a week and dont have to work. Thats why there is a skills shortage, never has there been a time in australian history when people have been so rich and been able to retire so early. IM going to have to work my ass off to get somewhere in this greedy world. Down with all the lazy baby boomers who have wrecked it for us!

Thanks OZZYRENTER,

I share your disgust and outrage at the self-serving lie, put by many who appear themselves to be property speculators, that housing is still affordable.

I am technically a baby-boomer, but didn't make the right career moves, had a relationship breakdown and was forced to sell my house, so I am largely in the same boat as you.

Howard now claims to favour housing affordabiity but before the 2004 elections he was actaully wearing the housing unaffordability as a badge of pride. Of course he didn't refer to it as 'housing unaffordability', rather it was the increase in the value of the assets of existing homeowners that his supposedly brilliant economic management had brought about.

When a questioned about housing unaffordably he deflected it claiming that everyone he met were grateful that the value of their asset had gone up.

Presumably he never met renters, and if he had, he was saying that they didn't matter to him because at that time they only comprised a minority of the population.

The fact that should have been obvious to even Howard back then was that increases in real estate values are of no net benefit to society. At best one person's gain is someone else's loss and indebtedness. In fact, inflated housing costs are a huge cost to the whole of society and those whose asset on paper, is worth, say AU$500,000, instead of AU$150,000 which is roughly what it should be, are not anywhere near as much better off as they would like to believe they are.

Whatever you do don't forget to vote against Howard. Not promising much joy from Rudd, but things can only get much worse if Howard is not thrown out.