Times have changed – and politicians “FAIL” with housing!

Times have changed – and politicians “FAIL” with housing!

Politicians are an interesting breed where on one side we have a government that finishes nothing and on the other side, an opposition that says nothing. Would it then be fair to assume that we are expected to know nothing as that way, when we see nothing, assume that something is actually happening?

These days, The Emperor (Kevin Rudd) is better credentialled to be sales manager of Flight Centre given his vastly accruing frequent flyer points.

With respect to The Emperor, we are spending billions on schools yet the last time I looked, nobody is living in them. So why renovate at this point? (plaques aside). It is very clear that as a matter of national urgency, Australia needs to be building housing accommodation to meet demand – our elected politicians (under the stress/threat of having to make a decision) forget that the property industry is the largest employer in Australia. Maybe they should read this article written by Stephen Lunn from The AustralianHousing stress getting worse – experts.


Tim Mooney Photography – Greenwich Point, Greenwich


No better example when The Australian and the Melbourne Institute jointly hosted a Road to Recovery conference this week. Enter Wayne Swan who said, “We’ve got to really get going when it comes to building a supply of housing or we’ll hit capacity constraints that will hurt us in the very near future.”

Wayne, we are already there as Australian Council of Social Service chief executive officer Clare Martin pointed out. “Some 850,000 Australians are now in housing stress, with rental costs gobbling up a high proportion of their income.”

On top of that, the OECD announced this week that food prices in Australia have increased 41.3 per cent since the start of 2000, which then prompted a Government minister to call “for greater competition” (no solution offered) just a comment. For the record, Coles and Woolworths account for approximately 80 per cent of the Australian market.

Back to Clare Martin “A third are low – income households. Add to that the 105,000 Australians who are homeless and you start to get a real idea of how big the problem is.” Remember that Wayne told us “we’ve got to get going” Clare Martin announced the Government’s $6.4 billion commitment to social and community housing (recently wound back by $750 million). Wayne, that is actually going backwards, “Nation Building was going to build 20,000 new dwellings (but) the outstanding need right now is 250,000 affordable homes.” The Australian reported just 73 homes so far had been completed under the Government’s spending plan. This end of the property market needs to be wound up, not back, as the top end is doing very well (Lachlan and Sarah Murdoch purchased ‘Le Manoir’ for $23 million this week).


La Manoir – Lachlan and Sarah Murdoch’s new Eastern Suburbs home

Economist Saul Eslake told the Road to Recovery conference, “One lingering effect of the financial crisis which is likely to exacerbate the housing shortage for some time yet to come is the difficulty which proponents of multi – unit housing developments are continuing to encounter in gaining access to finance.” So the banks lend to purchasers, yet won’t lend to developers which explains why, in Australia, multi – unit housing developments remain at historically low levels.

Alas, a Road to Recovery where Fort Fumble (Federal government) has turned the vehicle around and is attempting to drive backwards along the recovery road (with hazard lights beaming).

The Future Fund has around $60 billion in funds so why should it not enter the Australian property markets given the major banks’ reluctance to fund this emergency infrastructure market. It was built on selling government assets (Commonwealth and Telstra) so about time these funds were injected back into Australia.

Why does The Emperor still allow the Foreign Investment Review Board (FIRB) to relax regulations so that foreigners can purchase “new properties”. When “Finish Nothing” government spokesman for Assistant Treasurer Nick Sherry (he must be away too) said, despite the rule changes, the FIRB rules were designed to spur the creation of additional housing supply rather than add to affordability problems. Remember “Hogan’s Heroes”, Sgt Schultz – I know nothing!

The Australian Bureau of Statistics (ABS) smashed this “dumber and dumber” market assessment when it revealed this week, that fewer Australians own their homes outright and a greater number now rent (official data reflects worsening housing affordability). The Sydney Morning Herald journalist Chris Zappone wrote Home ownership down, renting up: ABS

“The proportion of people who owned outright by their occupants has dropped from 42 per cent in 1994 – 95 to 33 per cent in 2007 – 08. Over this same period the proportion of households renting rose to 30 per cent in 2007 – 08, from 26 per cent in 1994 -95.” Bear in mind that these figures will change significantly because First Home Buyers accepted the governments (collective) bribes to enter the property markets (casualties are yet to be determined).

Fort Fumble has wound back its boost for new and established dwellings to $3,500 from $7,000 (established) and $7,000 from $14,000 for new. At Fort Crumble (NSW government) you can collect $10,500 until the end of the year for established which then drops to $7,000 in the first half of 2010 and (steak knives) new dwellings $17,000 till the end of the year dropping to $10,000 first half of 2010.

Over to Business Spectator (free subscription) – Housing hopes which is always a fantastic daily read.

  • The number of Australian home loans rose by 5.1 per cent in September, after a downward revised fall in August of 1.9 per cent and July -1.6 per cent. Annually, loans are 8.1 per cent higher. This is the highest number of loans since January 2008.
  • Growth was driven by loans for construction (+8.1 per cent) and loans for established dwellings (+5.0 per cent, 85 per cent of total loans). Loans for new construction are at their highest since December 1994.
  • Loans were strong across states: NSW up 7 per cent, Victoria up 3.1 per cent, QLD up 1.2 per cent, SA up 1.1 per cent and WA up 14.4 per cent.
  • First home-buyers accounted for 26.1 per cent of new loans from 24.7 per cent in but still down from the May peak of 28.5 per cent. The size of a first home-buyer loan rose to $274,600 from $270,800 in August and $260,900 in September last year.
  • Loans to investors (by value) fell 0.1 per cent after an 8.3 per cent gain in August and are 18.4 per cent higher annually.

11-11-2009 1-28-25 PM

Source: Crikey – Lending figures vindicate RBA’s interest rate strategy.

Interesting to note that the Reserve Bank of Australia (RBA) increased the cash rate in October +0.25 per cent and +0.25 per cent November 2009. Consumer sentiment dropped 2.5 per cent in November (Movember) following consecutive interest rate rises. The Westpac – Melbourne Institute consumer sentiment index eased to 118.3 in November, from 121.4 in October, although it remained 38.3 per cent higher than last year’s level. The October rate increase saw the mortgage market contract for the first time in nineteen months from $2.9 billion in September to $2.6 billion.

Banking prediction of the week?

NAB’s chief economist Alan Oster said growing consumer confidence and an improvement in business conditions had increased the likelihood of another 25 basis point increase before Christmas.

Interesting comment. Never before has the RBA increased cash rates beyond two months in a row. Over to Big Al at the NAB “This is a pleasing result and as such, we expect there to be a 25 basis point increase in every RBA meeting till March.”

Clip of the week?

That would be “see nothing” – when applied to border security, housing and our road to recovery at Fort Fumble. Happy 40th Sesame Street and yes, history does repeat itself as do political episodes.

Cheers ^__^

For this week’s recorded Mosman real estate, Cremorne real estate, Cremorne Point real estate, Neutral Bay real estate and Cammeray real estate sales www.rwm.com.au/news/

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