Hi again EasyTimes
You need to read my paper at http://ssrn.com/abstract=1027864 more carefully because I agree with you.

Nowhere did I suggest that the price of a house/strata title and land/CLB shares will decline. It is the cost of NEW houses that will become half price NOT existing ones!

But in addition, tenants will be able to become owners of their dwellings without ANY purchase cost over 25 years even with land and housing prices increasing!

Oh dear, why do not people believe me when I tell them why houses are
out of reach of so many working people.
It is quite simple:
The government a long while back forced, in the name of equality, the
lending institutions to lend on two incomes.

Economics 1:

When you dump twice as much money into a market the price rises to
meet the amount of money available.

Borrow on two incomes, you need two incomes to meet the repayments.
Simple isn't it !

Bazz

You incorrigible funster, you. Do you think that there might be other factors determining price? Considering my tomato scenario might give you some insight as to why housing is so unaffordable. Say there are X people and Y tomatoes, and tomatoes cost $Z a kilo to produce. Now if people have twice as much money to buy tomatoes then any resultant shortage will only be temporary as there is then more financial incentive to grow tomatoes. However, if government sets severe restrictions on how tomatoes can be produced whilst engaging in a high immigration policy, then the price of tomatoes can be made higher.

The current housing prices result from a combination of 300,000 immigrants per annum and severe restrictions on landholders to develop their properties. Policies supposedly in place to protect residents do no more than give legality to the basest corruption.

We;; Fester your theory might be right if two people were buying two
houses, but in this case two people are buying one house.
Therefore the ratio of houses to incomes is 2:1 but in the case of
tomatoes the ratio is 1:1.

There is no point in building two houses to sell to them.
The only ones who won were the developers as they could charge twice as
much for the one product, after all there was twice as much money.

In your example there is twice as much money but there are now two
tomatoes to be grown to be sold for two pieces of money.

Simple isn't it ?

Bazz

"There is no point in building two houses to sell to them."

.......um, ever heard of spec houses, Bazz? But if spec houses did not exist you would still be quite wrong. Have you ever heard of competition? You know, where more than one person is trying to get the deal? In this instance you might have more than one developer competing to build the house. Do you think that several developers competing might lead to a lower price? The idea that supply and demand for a commodity is in balance is pure fantasy.

You logic is more surreal than simple.

The rule still applies; add twice the money to the market and the price
rises to match the available money and it all settles down at a new
level including the competition.

It IS that simple !