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.

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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.