In Warren Buffet's latest letter to share holders, he had this to say about housing in America.
"If home buyers throughout the country had behaved like our buyers, America would not have had the crisis that it did. Our approach was simply to get a meaningful down-payment and gear fixed monthly payments to a sensible percentage of income. This policy kept Clayton solvent and also kept buyers in their homes."
"But a house can be a nightmare if the buyer’s eyes are bigger than his wallet and if a lender — often protected by a government guarantee — facilitates his fantasy. Our country’s social goal should not be to put families into the house of their dreams, but rather to put them into a house they can afford."
When the Rudd government announced they were putting up the first homeowner's grant to $21k, I read of a couple in Perth (in their 30's) who were delighted. "Now, instead of going for a $200k loan, we can go for a $400k loan!" they enthused.
How much better if, instead of a one off grant, government offered a fixed interest loan (say 3%) capped at say $200k?

the whole housing issue is a destraction
there was massive fraud[still is ]..in this housing phurphy

what really happend was bundeling
and then insuring the bundles

irrecoverable debt was bundled with high intrest housing loan documents

[by bundeling all the mortgauge papers..with irrecoverable debt]
the bankers got back the money they overlent to anyone willing to sign a mortgauge]

the problem being..
the mortgauge holder alone can recover the house
in case of default...[some courts take it on trust..that the bank forclosing ACTUALLY HOLDS THE MORTGAUGE DOCUMENT]..

only the ORIGONAL holds any value
or right[to reposses]..but these are in bundles..held by who knows who
its not even known where[maybe in china..maybe never egsisted..no one knows

see the banks in selling them
got repayed..cant sue for the loan or the house back
it cant even produce where it 'lent' the money from..[in truth it created it out of thin air..by collusion and fraud]..

but as they were all in on the scam
[thus all earned jail time..its only a matter of time till they get what they earned

the finantial system is bankrupt
it will struggle on for some time
but essentially the bankers have gone too far this time

at least the poorest of the poor in africa
or china..own their hut
[till some banker decides to get them to mortgauge it]
to buy say a tv..and then they have a security they can sell

a contract to take to court
to take their hut...[when or if..the court issues an order]
and the sherrif sees it as a lawfull reason to act[and kick the bumms out of their hutts]

the bank then tears them down
puts them onto strata title
and sells the units
[those buying them will never own title too]
like whats going down in china at this moment

when that sceme goes bust
who knows

Grim:

...The facts don’t back up your reasoning behind the GFC; but I agree the solution to our housing crisis(a crisis all Governments refuse stubbornly to even acknowledge the existence of) rests in subsidised interest rates to a very low level; maybe zero for a time. But further….

…The sub-prime (mortgagor) crisis which became the precursor to the GFC was a cause of the Banks themselves, not the Mortgagor inclining themselves to overindulgence in a Mc Mansion at all.

...The collapse was a fracturing of the fault line at the point where the expectation that house prices would forever inflate. That mistaken belief led to the banks themselves lending to customers at low front end interest rates (adjustable rate mortgages), thus lower repayments in the short term, in expectation of a refinancing against the inflated property price at a later date if necessary.

...The whole burden of the loan scam fell on the shoulders of the small fry at the bottom of the heap, the borrower (mortgagor). House prices plummeted leaving the asset value of the property a worth below the borrowed capital: A situation which forced home owners to walk away from their homes, (The midnight flit) and abandon the loan obligations.

...Abandoned suburbs now lay in rotting vandalised decay awaiting economic recovery as homelessness reaches record levels in the USA.
Beware Australians, the horror awaits! How long can our country maintain the highest property prices on the globe? And why are banks rorting their unseemly profits right now?... To protect themselves from the inevitable melt down, somewhere in the not-to-distant future, alas.

diver dan
"The collapse was a fracturing of the fault line at the point where the expectation that house prices would forever inflate."

That's it in a nutshell.

So how can you conclude from that, that the solution "rests in subsidised interest rates to a very low level; maybe zero". It is precisely lowering interest rates - in other words, increasing the money supply - that causes the general phenomenon of inflation and the expectation that prices will rise.

There is no reason why government should be subsidising land-owners.

But even if there were, it's just a handout, so why not just give them cash? Inflating the money supply is just another way of taking the money from everyone that uses money, *and* causes dreadful economic chaos and social injustice at the same time.

There is no need to do this in order to make housing cheaper and more available. What government should do is *stop making it more expensive and scarce*. Instead of arguing for more governmental jiggery-pokery, we should be calling for government to:
- stop taxing the money people need to buy housing
- stop taxing all goods and services
- stop taxing housing
- stop restricting the supply of land
- stop increasing the costs of housing and land by a thousand regulations on everything to do with it.

While ever government is *causing* the problem on so many fronts, how can you possibly justify trying to solve it by measures which only make it worse, and cause economic chaos and social injustice as well?

How easy is it for land owners to sub-divide? Very difficult. There are vast amounts of suburban land, infrastructure in place, which are suitable for subdivision. Allowing sub-division of these areas would bring great amounts of new housing to the market, ending the affordability crisis. The current situation of heavy restriction and decisions made in secret is a case of the interests of a few being put ahead of the interests of the vast majority of Australians.

Well Peter Hume;

...As you are well aware, Capitalism is a system that thrives on scarcity. Housing all who need to be housed is an anti-capitalist view. Obviously, assisting all who need to be housed by offering benefits such as subsidised interest, sits badly with markets.

...Governments do not create housing shortages, they simply fail the people most in need of housing by ignoring the problem and failing to fix it up. But by ignoring the problem they do assist housing markets to remain buoyant (overpriced); by so doing though, they expose a priority of market health over social need (ballot box).

...But as you would be acutely aware Peter Hume, the current property values are a fools paradise.(refer America)