As I pointed out to Yabby on another forum "They're not really that poor" at http://forum.onlineopinion.com.au/thread.asp?article=6576#100198 :

You have done here exactly what you always do.

You simply restate, over and over again, the same
assertions, without any regard to earlier arguments
in response to those assertions. This serves no
useful purpose other than to bloat the size of
the discussion and waste the time of others who
wish to seriously discuss the issue at hand.

-end-of-quote-

And I see that he is intent on doing the same on this discussion as well. To others, I advise not to waste any more of your time answering the same arguments which have been made many times before by Yabby and refuted many times before.

The simple facts which Yabby pretends not to have noticed are that:

1. "... average house prices have gone up, from 3.3 times the median wage in 1970 to 7.4 times in 2005. This must be a major stress on any budget." ("Living standards and our material prosperity" http://forum.onlineopinion.com.au/thread.asp?article=6326#92771). Roughly similar figures were given above by MrSmith at http://forum.onlineopinion.com.au/thread.asp?article=6697#100759

2. As a consequence, it is necessary for at least two people to work (and sometimes, at that, for one to even work at two jobs as I have shown).

3. Mortgage loan repayment periods have been extended well beyond the maximum of 20 years that existed up until a generation ago to 30, 40 and in some cases 50 years.

These facts should have made it obvious to even a moron that the problem is extremely serious. And why would it be otherwise? How else would it have been possible for land speculators to have made all those spectacular unearned windfall profits in the past unless someone else was to be made to pay for them?

The problem is real and it is here now, and isn't going to be fixed, except at an unacceptable cost to the environment, our quality of life and future generations by Yabby's half-baked 'solutions':

(tobecontinued)

(continuedfromabove)

* bulldoze yet more bush or farmland and pave it over with concrete and asphalt.
* everyone move further even further away from where there are services and jobs when petrol prices are set to only rise further and spend 3, 4 or more hours per day commuting to and from work.

Regarding roads, congestion: It is a serious problem in Brisbane and fixing it, if it can possibly be fixed at all, is going to cost a fortune thought increased rates, taxes and toll charges in the order of $48.00 per toll road (5x2x$4.40) per week.

As I have shown, it's a waste of time trying to put such facts to the likes of Yabby. I suggest leave him out and only engage with those who want to discuss the matter at hand honestly.

---

MrSmith, your posts are spot on EXCEPT that you have ignored the evidence that population grwoth must caus property prices to rise. As I wrote above, I heard this coming form the mouth of a spokesman for the REIA. See also, as just one of many examples:

http://www.realestate.com.au/review/apr072/prices_soar.html?from=review

The rich will get even richer this year as the nation approaches another massive property boom, a property expert has tipped.

Michael Yardney - who runs buyers' advocacy service Metropole Property Investment Strategists - ... says 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.

--end-of-quote--

Also, read Sheila Newman's excellent Thesis "The growth Lobby and its absence" (248 pages + notes, 2.6MB pdf) downloadable from http://candobetter.org/sheila

Daggett, if more and more people moved away from services and jobs, market forces will demand that eventually services and jobs will move to them. Commute times can be cut significantly. Governments can have a hand in speeding up such changes by giving incentives for businesses to open in regional areas. Population growth in the regions means that services will be at some stage upgraded.

On the other hand you have some regions crying out for workers of all types and offering all sorts of incentives to get people there (and I am not just talking about mining either). Housing is medium-priced, but still much cheaper than the city, and people would be lucky to have a 10min drive to work. Where is the pioneering spirit that this country used to have??

Col, I agree with your last comment re "untaxing". Not entirely sure what was meant, but suspect that these items are expected to be tax deductible. If so, then ignorance is being displayed again, as depreciation on plant and equipment IS tax-deductible (with the net result of not paying any tax on purchases) and there are provisions that allow for the write-off of capital improvements (buildings), that have the same effect. Its just that deductions are spread over the useful life of the item (an accounting concept as you would know), rather than being immediate.

Soaring property prices are obviously influenced partly by population growth, but real estate bodies make this and inadequate land supply the ONLY reasons for housing unaffordability. Karl Fitzgerald's study in just one Melbourne inner suburb shows this isn't the case, because 10% of the land is being held off the market. Producers can't hold tomatoes or cars off the market, because tomatoes rot and new cars rust. So, Fitzgerald's point that land prices are high because rates and land taxes are too low to create a real 'property market' where speculators can't simply sit on vacant land seems to be a valid one.

Col Rouge wrote: "...you take an open statement and narcissistically presume I am talking to you, personally..."

No, I presumed I was AMONG those he was talking to, and invited him to explain how his comments related to me. He couldn't.

"Some speculators are called developers..." His words, not mine. Developers do a lot of "new construction". Some even double as house builders; but even the others build roads, kerbs, drains, etc. By implication, I'm happy for them to negative-gear while they do that, but not while they merely hoard the land. That selective policy would encourage "developers" to develop.

Col then asserts: ``If the tax implications of negative gearing did not apply...

1 the developer would have not make as much return either from
A no investors buying his houses
B those investing, adjusting the price downward to maintain an acceptable level of financial return.

This would slow the new house development cycle...'' etc.

WRONG as regards my proposal that negative gearing be "allowed for new construction, but disallowed for future purchases of established homes", because that policy would cause investors to PREFER freshly developed lots, on which they could readily EXPAND THE SUPPLY of accommodation (this being the point of "new construction").

At worst the developers, instead of building houses themselves, would sell lots to investors who would be newly motivated to build. But even that preference would not arise if "new construction" included purchases of homes not previously occupied. There is actually a precedent for this: the Howard government's temporary supplement to the first home owners' grant was available only for homes not previously occupied. That good idea was quickly buried.

Col writes: "If you own a house, you decide to rent it out or if the risk of tenant damage is too high, to lock it up." But if Col really cares about affordability, he will support tax policies that encourage owners to take the risk -- e.g. holding taxes on site values.

Complete "untaxing of buildings and plant & machinery" means no taxes on capital or on income from capital (land isn't capital; see http://homepage.ntlworld.com/janusg/coe/!index.htm).

Yabby, I've spent quite enough time in and around Brisbane and Sydney (not to mention cities overseas) to know that freeways make very little difference to travel times during the most popular travel hours. And actually Melbourne did have freeways 30 years ago, though certainly they've been extended outward since. However the bulk of the traffic is still traveling along much the same roads that existed 30 years ago, designed to carry about half the traffic they do.
If Perth has somehow managed to avoid this problem, then kudos to the governments and planners overseeing its construction. But if that is your yardstick, then you have a very warped view of the world.
Realistically, the major population centres of Australia can't be redesigned in a hurry, and that's where the bulk of us live (and want to continue to live). If Perth has so far avoiding the housing affordability problem, then young families there should count their blessings.

Further, I don't believe that it is an acceptable solution that the only place a young family can buy their first house is 30 minutes drive away from where their parents lived, or where their jobs are. The more dependent we are on cars, the more exposed we are to likely future disruptions of the global oil market, the more we continue to contribute towards various forms of pollution, the more we continue to expose ourselves to the risk of road fatalities, etc. etc. A genuine, long-term solution to housing affordability will also allow the vast majority of the population to have the freedom the choose alternative forms of transport for the bulk of their travel needs, ideally their own two legs.