Thursday, May 7, 2009
Wizards of OZ
An analysis of the Australian Property Market
A bit of Pommie and Yank bashing that hurts a bit. It is always a good idea to see how economies should be managed. A very good analysis of why the UK and US are in more trouble
Posted by maddison @ 11:56 AM (771 views)
3 thoughts on “Wizards of OZ”
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d'oh says:
What a load of tosh!
Unless of course it truly is different in Oz. 😉
paul says:
Yes, looking more closely at this article, the arguments put forward sound remarkably familiar.
1. Immigration
That population ‘growth’ will reverse very quickly when the economy turns.
2. Housing lack of supply. This is probably the smelliest red herring property experts have ever chowed on. If you suspect there is a true lack of physical property supply you’ll know because people will be sleeping rough and cross-generational co-habiting like in Victorian times. Only 15% of Japan’s land is actually flat enough to build residential or commercial property – but he seems to think there is a significant oversupply there?! The key is affordability relative to (modal) average wages.
3. Interest rates. The argument that the UK only started cutting interest rates well after house prices started dropping is tosh. By the time house price inflation went negative, interest rates had been slashed to 2%!
4. Northern Rock. The writer seems to think that NR’s collapse led to a removal of mortgage lending – it didn’t. He’s confusing cause and effect.
mander says:
Oops Australians to be became the first to manage the property bubble. It has been claimed:
“First of all, consider population growth. The Australian population is currently growing at 1.84 per cent per annum”
Please make sure this growing population are kept in house like sardines so that Australian’s wealth is not diminished. Do not ever create completion in house building and banking? Or maybe banking not.