The point is Peter, as I suspect you know well, is that Western Countries have a rich tradition of creating/intervening in markets in such a way as to produce egalitarian outcomes.
In such cases, egalitarian means that a person's access to essential goods and services are not unduly affected by where they sit in the income distribution.
The housing system runs the risk, if it isnt already too late, of becoming something that runs very much contrary to that most civilized of principles.
And its a great shame.
Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?
The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly. Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
The point is Peter, as I suspect you know well, is that Western Countries have a rich tradition of creating/intervening in markets in such a way as to produce egalitarian outcomes.
In such cases, egalitarian means that a person's access to essential goods and services are not unduly affected by where they sit in the income distribution.
The housing system runs the risk, if it isnt already too late, of becoming something that runs very much contrary to that most civilized of principles.
And its a great shame.
I agree. I have thought for some time that we are seeing a split in western economies between the haves and the have nots. There has always been a divide, but since the western economies ceased wealth redistribution policies during the Reagan/Thatcher years it's become ever more acute.
Families can now accumulate over many generations to build dynasties.
I said as much in a post over at MB - the post was immediately deleted - didn't want to know.
I expect home ownership rates to fall over time. That isn't an endorsement, it's an acknowledgement of what I see.
Property is a factor in everything that we do. we live in it, we work in it, we go to the movies, a restaurant, a game of football, everything takes place in property. It's not an insignificant part of our lives and those who control it will accumulate more wealth and power. When more and more comes into the hands of less and less, they can charge whatever the users can afford to pay. That's what the game of monopoly is all about.
Why are house prices rising in economies that have so recently experienced a house price crash?
If you look at history it's always been so, we are just establishing a new hierarchy to replace an older one.
Any expressed market opinion is my own and is not to be taken as financial advice
What about free primary and secondary schooling? Who loses?
No public service is really 'free'.
In both cases, the losers include taxpayers who fund the services but don't use them.
Others losers have also been mentioned above.
I never said it was.
What is being discussed is the desirability of a system that creates gross inequality.
See Peter's post above.
I note however that many, many posters on this forum don't do "enlightened self interest" preferring to stick with a basic pig man philosophy on life.
Each to his own.
Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?
The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly. Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
No doubt written by a hypocrite who maintains and spends on himself an income greater than that of >90% of the rest of the world, and many times that of the average world citizen.
Rich people are always preaching the virtues of government instituted equality but ignore the obvious action available. That is, to give to the extent of reducing their own wealth and income expenditure to something below the world median. Only then will they avoid the hypocrisy of their priggish preachings.
It all reminds me of Band-Aid and arch-hypocrite Bob Geldof yelling, swearing and insulting people much poorer than his rich self to give their money away to his cause, following which he spent a fortune on a jet setting wedding to Yates in Las Vegas.
I and the entire generation of young adults excluded from home ownership have a Plan B.
We rent or live with the Olds. We save the difference. We invest elsewhere. We educate ourselves. We travel.
This youthful energy has been deflected but cannot be denied!
For heaven’s sake, my Barista has $150k saved – on his crap wage. Will he buy? No way! It just doesn’t make sense.
Renting is a bargain, an absolute bargain compared to buying. If land prices remain painfully high in Australia while they have retreated in the Western nations we compare ourselves to (save Canada and NZ) then emigration is a realistic alternative for many.
Even young adults who have never heard of arbitrage can practice it.
And those 1.5 million Negative Gearers? They’re toast.
This is the most awesome Ponzi scheme ever invented. They will run out of working life before rents = outgoings.
Depressed housing credit growth speaks to the grim, determined exit from debt by those who can and the weak appetite for new borrowing by young adults.
This is despite record low interest rates, truly staggering migration levels and a culture that elevates speculating on principal place of residence above passing fads like child-rearing and retirement.
We know there is wave of boomer downsizing immediately ahead.
I and the entire generation of young adults excluded from home ownership have a Plan B.
We rent or live with the Olds. We save the difference. We invest elsewhere. We educate ourselves. We travel.
This youthful energy has been deflected but cannot be denied!
For heaven’s sake, my Barista has $150k saved – on his crap wage. Will he buy? No way! It just doesn’t make sense.
Renting is a bargain, an absolute bargain compared to buying. If land prices remain painfully high in Australia while they have retreated in the Western nations we compare ourselves to (save Canada and NZ) then emigration is a realistic alternative for many.
Even young adults who have never heard of arbitrage can practice it.
And those 1.5 million Negative Gearers? They’re toast.
This is the most awesome Ponzi scheme ever invented. They will run out of working life before rents = outgoings.
Depressed housing credit growth speaks to the grim, determined exit from debt by those who can and the weak appetite for new borrowing by young adults.
This is despite record low interest rates, truly staggering migration levels and a culture that elevates speculating on principal place of residence above passing fads like child-rearing and retirement.
We know there is wave of boomer downsizing immediately ahead.
Ignore this force at your peril.
Don’t Buy Now!
not having a foot in any property whatsoever might be a foolish play though (even a sub 100K rural IP is a thousand times better than nothing for risk management imho)
the only thing worse than being broke in old age (like me) is being broke and homeless
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