Fran wrote:
> On Jun 17, 7:31 pm, fasgnadh <fasgn...@[EMAIL PROTECTED]
> wrote:
>> "Home grants scheme blasted"
>> - The Age 17/6/2008
>>
>> "THE first home buyers' grant has forced house prices up in
>> recent years, working against its aim of making new homes
>> more affordable, a Senate inquiry has found."
>>
>> I must say.. I told you so.
>>
>> "Urging an overhaul of the scheme, the Senate Committee
>> on Housing Affordability found that the system of $7000
>> grants for all first home buyers had "benefited existing
>> home owners rather than those seeking to enter the market".
>> The committee, comprising Coalition and Labor senators,
>> also found that negative gearing and state fees such as
>> stamp duty were compounding the affordability crisis."
>>
>
> Gosh ... who would have thought that extra purchasing power realtive
> to demand would have translated into higher prices?
>
> Oh ... that's right, someone with economic credentials.
>
> Now, the Libs *claimed* economic credentials so were they lying or
> were they simply being hypocritical?
>
> The reality is that if you want housing affordability to improve
> you've got to do one of two things -- increase supply relative to
> demand in markets where demand is putting upward pressure on prices,
> weaken demand relative to supply in those markets or weaken the
> ability of purchasers to bid up prices.
>
> It seems to me that the last of these must be one im****tant arm of
> policy, but of course, this strikes at those who bought into the
> market without the constraint and who would be left with an overpriced
> and overgeared asset -- so that's politically risky. To get away with
> it you have to spread the constraint over a long enough timeline for
> the assets to run down in real terms and allow losers to limit losses
> and get compensated by buying into a market that is not appreciating
> or slightly declining in real terms.
>
> That leaves increasing supply, but again, the same political
> constraint applies. You also have some real shortages in skilled
> labour and also zoning issues which both limit the speed at which you
> could move.
>
> Bottom line - affordable housing is not going to be solved any time
> soon. Fifteen to twenty years of rational policy will be needed.
>
> Fran
Not necessarily. The affordability problem is being solved much faster in
the US.
|
