It's interesting that we now have a Shadow Treasurer, the previous minister for Immigration under Labor, commenting on the blowout of the housing bubble, who is seeing the evidence of high rates of immigration - and loose borders that allow foreign investors to strangle the real estate market.
Economist Saul Eslake, a member of the National Housing Supply Council, said vested interests from property owners and politicians meant policies that could support first home buyers - such as the abolishment of negative gearing and lower costs for new developments - were unlikely to ever see the light of day. The housing Ponzi scheme is being driven and manipulated by investors, who create and guarantee their portfolios delivered by high rates of population growth and heavy support for domestic and foreign investors.
Booming housing market leaves first home buyers behind, says Chris Bowen by Glenda Kwek and Simon Johanson in the Melbourne Age of 16 Nov 2013.
All Ponzi schemes eventually collapse. Back in February 2012, Deakin University’s Philip Soos said that the only thing that prevented Australian house prices from crashing during the 2008 GFC was the first-home owners’ boost, who believes the sector is now operating like a Ponzi scheme. According to Soos, the tipping point for the mark will come when “the household sector is so overloaded with debt there exist no more ‘greater fools’ willing to commit to a lifetime of debt serfdom to purchase property”.
See Australian housing a Ponzi scheme and the housing bubble will burst by Larry Schlesinger in the Property News of 7 February 2012.
Sooner or later you run out of unsuspecting new investors and the whole thing collapses.
The end of the housing bubble will hurt our economy, but it's time to make the transition to a real and productive economy, rather than the predatory one of mortgages, accumulating more and more potential buyers (victims) into the scheme, and the strangle-hold property developers.
Anonymous (not verified)
Thu, 2013-11-21 21:28
SMH did not publish this letter - wonder why?
Since when did Sydney rescind from Australia's sovereignty and become an "international city", as assumed by Stephen Hegedus? (letters 18/11). This generation should not have to lower expectations of home ownership
and living standards, what was enjoyed by previous generations.
If Manhattan is an example of unaffordable housing, then this is what we need to avoid, not celebrate!
The problem is the Ponzi housing and economic growth scheme, supported and promoted by our governments. While it's easy to point the finger at the greed of investors, and the GFC, they all exacerbate the public's
slide down the Ponzi of endless population growth, and the privileges it gives to the investors and bankers at the pyramid's apex. Such pyramid schemes thrive on accumulating more and more victims, adding to homelessness, debt, unemployment, costs of living and intergenerational declines in life's expectations.
A stable population would level out the costs of housing, and ensure that future generations are not denied the well-being, living standards and opportunities enjoyed by past generations.
Fri, 2013-11-22 09:34
Questions and shows the downside