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.