[Max Carnage]

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Reserve Bank Governor Glenn Stevens' brief Tuesday announcement notes that ''credit outstanding for housing has slowed a little over recent months, and the upward pressure on dwelling prices appears to have abated'' - which means the RBA isn't worried about a housing bubble here right now, but the imperative of increasing housing supply to constrain price rises remains.

With the major parties concentrating on a few big lies during the election campaign, housing policy barely surfaced as an issue, except perhaps for the hugely irrelevant matter of housing a few boat people.

Both parties had policies, if you went digging for them, a Regional Better Cities program here, a National Home Affordability Compact there, whatever that meant, but it seemed no-one wants to take responsibility for something as tricky as affordability.

For a start, the issue is caught in the tangle of state and local governments, bank credit policies, confusion between social and affordable housing and the feds somewhat sidelined but knowing they need to play while facing plenty of competition for resources locked up in debt-reducing budget priorities.

An easy example of the mess has been the stand-off between the NSW and western Sydney local councils over capping developer levies in an attempt to make new housing cheaper. The state eventually capitulated as the councils simply stopped processing applications.

Yet there could be default method in governments' madness. Allowing city housing affordability to rise close to world's worst status eventually makes means the market mechanism work - forcing people out of the most desirable cities and into cheaper regional Australia. Just what three prominent independents want.

Maybe the vaunted ''new paradigm'' is actually policy by default - nah, that's been the case for years.

Michael Pascoe is a BusinessDay contributing editor.

Full article: http://www.smh.com.a...0910-1547t.html

[goethe]

One benefit of a potential crash is making this tosser eat crow. The reincarnation of Goebbels.

[Dose]

re. China:

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At least it's nice to see a government with housing affordability as a goal and actively working on policies to achieve it.

...when did Pascoe support the idea of affordable housing? If I'm not mistaken he's a "no bubble here" cheerleader... very odd.

This post has been edited by Dose: 12 September 2010 - 04:06 PM

[RumpledElf]

And when will someone higher up the food chain actually recognise that affordability doesn't mean more land releases, or smaller houses, or apartment living, or shunting people out of Sydney to the regions - it means making CHEAPER HOUSING. Everywhere.

But nooo that would erode the nation's asset balance sheet.

[Turkey]

I sometimes wonder whether people who hate Pascoe so much have read his articles??

I've read a few lately and I thought they've been pretty good, except for the one where he was cheerleading Battelino.

*ducks for cover*

[Bernard L. Madoff]

Turkey, on 13 September 2010 - 01:19 AM, said:

I sometimes wonder whether people who hate Pascoe so much have read his articles??

I've read a few lately and I thought they've been pretty good, except for the one where he was cheerleading Battelino.

*ducks for cover*

The gold bull run being over another recent one. I believe AU was around 1170(US). I loaded up. He's a fool who cannot see a problem with debt driven perceived prosperity.

[Turkey]

Bernard L. Madoff, on 13 September 2010 - 01:43 AM, said:

The gold bull run being over another recent one. I believe AU was around 1170(US). I loaded up. He's a fool who cannot see a problem with debt driven perceived prosperity.

To be fair he was mostly quoting Rory Robertson and this was his conclusion:

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But it's a brave soul who takes on the gold bugs, particularly when it's seemed they've been right for the past decade. I wonder what Rory Robertson thinks is the path to peace in the Middle East...

Did anyone read this article, I thought it was pretty good: link?

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Fat seven or eight-figure base pay apparently isn't enough anymore to get anyone to work to the best of their ability. Just not stuffing up the job is worth another million, while actually doing it well is somehow regarded as so exceptional as to be worth an extra fortune, amounts the rest of the population only dream of as they buy Lotto tickets.

Perhaps the most hilarious example of nonsense largesse was the $5 million bonus the Leighton Holdings board was going to pay Wal King for finding his successor - if successful succession planning isn't part of a CEO's normal work, I don't know what is.

I think it's easy to focus on problems (I suppose one can't fix what is already right) and then get more miserable about things than necessary. E.g. nobody phones me to say that their IT systems are going great and for a general chat - they only phone if there is a problem (maybe it's just me!). This means it's easy to get the idea that the customers are all unhappy, but fortunately when I meet with them the opposite seems to be true.

I think if one looks at the bigger picture in Australia, it's great. One can make decent money without killing oneself, or lots if one does. Unemployment is low, the weather is good, people friendly, crime is relatively low, there is a social safety net etc etc. Of course there's stuff that could be better but no place is perfect.

We can choose only to focus on the things that aren't 100%, particularly housing affordability, and convince ourselves that Australia sucks. To me Pascoe is the guy that keeps it real and phones you to say things are going good (and if one compares Australia to nearly anywhere else they are IMO).

*slips under rock*

[tor]

Turkey, on 13 September 2010 - 02:24 AM, said:

E.g. nobody phones me to say that their IT systems are going great and for a general chat - they only phone if there is a problem (maybe it's just me!). This means it's easy to get the idea that the customers are all unhappy, but fortunately when I meet with them the opposite seems to be true.

I have one client that does call for a general chat, worst client to have, you can't charge them for their time as they are just being friendly and there is nothing to fix

Turkey, on 13 September 2010 - 02:24 AM, said:

I think if one looks at the bigger picture in Australia, it's great. One can make decent money without killing oneself, or lots if one does. Unemployment is low, the weather is good, people friendly, crime is relatively low, there is a social safety net etc etc. Of course there's stuff that could be better but no place is perfect.

We can choose only to focus on the things that aren't 100%, particularly housing affordability, and convince ourselves that Australia sucks. To me Pascoe is the guy that keeps it real and phones you to say things are going good (and if one compares Australia to nearly anywhere else they are IMO).

*slips under rock*

The articles you quote are two I remember reading and not being annoyed by. I agree about Australia too. I'd much rather have houses that cost 10x income (I don't have to buy) than have no income (US style).

Doesn't mean we can be complacent though. The numbers indicate a problem is brewing (and I think has started) but with any luck the problem will be dealt with a lot nicer than many other people attempts (although I get more and more pessimistic about that every day nothing gets done).

[gibber_blot]

Turkey, on 13 September 2010 - 01:19 AM, said:

I sometimes wonder whether people who hate Pascoe so much have read his articles??

I've read a few lately and I thought they've been pretty good, except for the one where he was cheerleading Battelino.

*ducks for cover*

Yes, I've read a few. He is the perfect example of a good writer but a crap economist. He likes to play "level head", but he played that role in the US sub-prime lending fiasco in 2007. Anyone who predicted a US property crash was a "doom and gloomer". He recycled the same arguments for the Australian housing market.

He spoke at a conference I attended last year. He was an ok speaker, but ill-informed economically. He even trotted out a rebadged broken-window fallacy in the old "natural disasters are good for the economy because you have to rebuild stuff". I have to be honest and say that any who believes having stuff destroyed and then rebuilt makes us wealthier is not worth listening to. They simply view economics through the wrong lense.

[Turkey]

gibber_blot, on 13 September 2010 - 03:18 AM, said:

Yes, I've read a few. He is the perfect example of a good writer but a crap economist. He likes to play "level head", but he played that role in the US sub-prime lending fiasco in 2007. Anyone who predicted a US property crash was a "doom and gloomer". He recycled the same arguments for the Australian housing market.

He spoke at a conference I attended last year. He was an ok speaker, but ill-informed economically. He even trotted out a rebadged broken-window fallacy in the old "natural disasters are good for the economy because you have to rebuild stuff". I have to be honest and say that any who believes having stuff destroyed and then rebuilt makes us wealthier is not worth listening to. They simply view economics through the wrong lense.

Ok, I've never really read his stuff before because I'd heard bad things about him. Then I read a few columns recently and was surprised and quite impressed, maybe he's just on good form or writing on topics he knows?

Do you have any links to what he wrote on the US for **** and giggles?

[Turkey]

tor, on 13 September 2010 - 03:08 AM, said:

Doesn't mean we can be complacent though. The numbers indicate a problem is brewing (and I think has started) but with any luck the problem will be dealt with a lot nicer than many other people attempts (although I get more and more pessimistic about that every day nothing gets done).

Yes, there is a bit of an 'issue' and the current approach by governments resembles an ostrich.

Reading between the lines and listening to industry insiders like b_d, there are 2 things govt seems hell-bent on:

1. Avoiding a housing crash (which wipes out everything except cockroaches) and
2. Being the govt in power at the time of the crash and therefore blamed for it.

I don't know whether Australia will avoid one or not but I would be surprised if real house prices always remain as high as they are.

At least with Australia there are 'ifs and buts' about whether there will be serious problems in future. E.g. will unemployment rise, will China lose the plot, can the banks still attract funding etc.

Other English-speaking first world countries (which are the choices that my wife and I debated a few years ago when deciding where to move) look much more definitely farked to me. They're either stuffed already or IMO headed that way. Maybe Canada is an exception but I can't do cold.

[Bernard L. Madoff]

gibber_blot, on 13 September 2010 - 03:18 AM, said:

Yes, I've read a few. He is the perfect example of a good writer but a crap economist. He likes to play "level head", but he played that role in the US sub-prime lending fiasco in 2007. Anyone who predicted a US property crash was a "doom and gloomer". He recycled the same arguments for the Australian housing market.

He spoke at a conference I attended last year. He was an ok speaker, but ill-informed economically. He even trotted out a rebadged broken-window fallacy in the old "natural disasters are good for the economy because you have to rebuild stuff". I have to be honest and say that any who believes having stuff destroyed and then rebuilt makes us wealthier is not worth listening to. They simply view economics through the wrong lense.

Yup. He likes rehashing other's opinions so he's bulletprof when it reverses (like Roberston and Gold). Could't polish Ambrose-Evans' bollocks for research and eco smarts.

C grade bullsh*tter.

[Bernard L. Madoff]

...for that matter Kohler is now moving with tide and wind direction (I get his Eureka report forwarded). Gloom one week, boom the next.

[Sean]

gittins is scarcely any better half the time....

[B9force]

Max Carnage, on 12 September 2010 - 12:35 AM, said:

Full article: http://www.smh.com.a...0910-1547t.html

I enjoyed the following contribution in the comments section:

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As an expat living in China, I notice that while housing prices have been rising, the government has made unique ways to slow the market down. A limit to the number of properties you can own - only two, your investment property must have a large cash deposit of at least 40% and they have tightened up lending. The Chinese don't use credit like the western world where 100% is borrowed on every thing, large deposits are the norm and credit cards are not handed out to every one. The locals make jokes about the western attitude to credit and point out that is why the we are broke and slaves to the banks. I doubt you will see China crash they have both hands on the wheel.

Az | China - September 10, 2010, 1:30PM