MSM embraces housing doom

By Leith van Onselen

In case you missed it, The Sunday Age yesterday ran a great article on the epic housing supply glut that is affecting Melbourne where, according to SQM research, the number of homes for sale has hit a record high, around double 2008 levels:

Here are some key extracts from the Sunday Age article:

MELBOURNE’S urban fringe has been swamped with 35,000 unsold homes, prompting warnings the glut could trigger a further slump in property values, and fuelling criticism of the Baillieu government’s ”crazy” decision to expand the city’s boundary…

Of the record 55,290 unsold homes in Melbourne in June – the highest number of any capital city in Australia – most were concentrated in about 50 suburbs on Melbourne’s periphery, where more than 60 per cent of all unsold homes in Victoria are located, according to data from SQM Research.

As demand has fallen over the past year, the number of outer suburban homes with ”For Sale” signs has jumped by almost 40 per cent…

”We’re just not seeing any end in sight to this glut of new supply coming into the market,” said SQM Research managing director Louis Christopher. ”It seems obvious there is only one direction for prices. That’s a frightening possibility if you’re a property owner”…

”It’s like a ghost town in the new developments. Nothing has moved for the past three, four, five, six months,” said Hocking Stuart agent John Halkidis, who works in northern suburbs including Bundoora and Epping.

The tough market conditions are expected to deteriorate even further, with research showing developers are poised to release another 75,000 new home sites at 126 existing housing estates in the city’s growth areas.

”In good times, that would be equivalent to a five-year supply. Right now, it’s more like a nine-year supply,” said Robert Papaleo, research director for property analysts Charter Keck Cramer…

But claims of a housing glut were rejected by development industry groups, the UDIA and the HIA.

”There’s no reason for concern. The stock on the market tells you nothing about the fundamentals. It’s underlying demand that matters. Melbourne’s new homes market is in good shape,” said HIA economist Andrew Harvey.

As noted many times previously, Melbourne’s already fragile housing market is about to get a whole lot worse as a torrent of new homes either planned or already under construction, continues to flood the market:

Meanwhile, new home sales, which are already highly subdued (see below chart), are about to take another leg down following the expiry of the $13,000 First Home Bonus on 1 July 2012.

Meanwhile, over at the AFR, there is an excellent feature covering national housing more broadly but picking the theme of a sudden oversupply:

Why are there so many homes for sale? Consider the comments made to AFR TV this week by RP Data research analyst Cameron Kusher, after pointing out there were about 300,000 homes for sale around the country. “I remember back in the global financial crisis we were worried about the amount of stock on the market and then I think it got up to around 240,000,” Kusher says. “What would be good for the market is if some of those people realise that they’re not selling, there’s not much point in keeping it advertised, take that property off the market.”

If houses aren’t selling, simply building more might not be the only answer.

Tax reform is another being advocated. The argument goes that inefficient taxes are making housing unaffordable, slowing down housing formation by forcing young people to stay at home longer and artificially reducing demand.

Committee for Sydney strategic adviser Tim Williams was an adviser to the United Kingdom’s housing and regeneration ministers for five years until 2010.

He congratulates state governments for speeding up land delivery and streamlining the approval process for developers. But he also wants to get rid of stamp duty and replace it with a broad-based land tax, reconsider capital gains tax exemptions on the family home, and stop subsidising loss-making properties through negative gearing tax breaks.

“We have made incentives to people already in houses so attractive they are outbidding everyone else for a home,” Williams says. “This is becoming so perverse now that in Sydney the most successful way of obtaining a home is inheriting money.

“Seventy per cent of 35-year-olds cannot access home ownership at this point in time. Twenty-two per cent of Sydneysiders own 55 per cent of homes. People who have access to home ownership are leveraging that to buy more units to rent out. Effectively younger people cannot access home ownership and that is a crisis, but it’s hidden because they are staying at home until they are 31.”

He thinks we need a “very big public debate” about the policy incentives that help young people obtain home ownership, and is looking beyond the current staple of handouts to first-home buyers and temporary cuts to lucrative but inefficient property transfer taxes.

Governments are shy of reform, even despite the urging of the likes of former Treasury secretary Ken Henry in his review of taxation last year, and NHSC deputy chairman Saul Eslake.

But pressure is mounting from a growing community of activists like Australians for Affordable Housing, Earthsharing Australia and Prosper Australia, who think the Australian housing market favours the old at the expense of the young.

They argue supply and affordability cannot be looked at in isolation. Housing shortages in boom times can turn to oversupply when times get tough as people group together to save costs.

Let’s hope that the strong “underlying demand” trumpeted by the HIA and NHSC comes out of hiding. Otherwise, Melbourne’s housing market is in trouble.

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Comments

  1. A healthy and efficient housing market is critical. That inevitably involves a very long slow melt or prices falling.

    A long slow melt sounds good in theory but in practice may be extremely difficult.

    It is simply impossible if governments actually take action, which they seem to be doing in NSW and VIC, to correct some of the supply blockages that contributed to the inefficient market.

    The idea expressed by the usual industry suspects that government should restrict supply to maintain ponzi pricing is unsurprising. Hopefully few will take it seriously.

    There will be plenty of demand for affordable housing – we just havent got there yet.

    • If you really want to actually sell as distinct from advertising at a price you would love to get, you have to take matters into your own hands and find where the market clearing price is for your house. RE agents are trying to keep asking prices up even at the cost of sales, creating price anchoring by sellers. Selling it yourself is a profitable exercise, particularly in less active areas. You do have to be realistic in asking price, otherwise you just get to stay there.

      • All agents love turnover not price – an extra $50k on the sale price makes little diff to their fee.

        Bad Agents tend to promise the world to get the listing but then tell you the market has turned.

        Good agents tell you the truth but may not get the listing as result.

        Sellers in denial find themselves with bad agents for a reason.

        If you make it clear you are not interested in bulldust most agents wont bother.

        But it is not a bad idea to not explain this until you hear their spin as a bad agent who will spin you a story to get the listing is best avoided.

  2. The Patrician

    I was surprised Chris V didnt use any of the many available graphs in his piece.

    That SQM Stock on Market graph from Western Melbourne is genuinely shocking.

    Graphs can be far more illustrative than clunky data tables.

  3. MsSolarFelineAU

    ………And, the QUALITY of the stock on market is…..????

    Anywhoo, here is evidence, and some posters here will still deny there is NOT a shortage.

    Have a great day peeps!

    • MsSolarFelineAU, your comment is typical lack of thinking from a shortage-denier.
      The article clearly indicates that the shortage in Sydney is far worse than the shortage in Melbourne.
      Are you aware that Melbourne and Sydney are different markets?

    • The joys of double negatives.

      Just because house prices can fall even if there is shortage doesnt mean to say that you need to try to prove there is NO shortage.

      In any event that debate is very boring.

      Clearly removing the supply impediments has been a good thing in Victoria regardless of whether or not you are convinced there was or was not a shortage to begin with.

      Better to be safe than sorry when it comes to creating an efficient housing market.

      The construction boom in Melbourne will ensure that prices start to adjust in real terms and also nominal terms sooner.

      Hopefully the same thing will happen in Sydney before long and i would sooner have a construction boom to encourage it than sit around arguing whether or not there is currently a ‘shortage’ of housing in Sydney.

      • Prices falling while there is shortage: That’s a new one.

        When everything else fails, twist the definition of the word so that you can still fit it under the framework. It’s called “sciense as you go”.

        To paraphrase Prof. Steve Keen: “Add another epicycle…”

        -gt

      • It sounds bizarre but isnt – unless uou have trouble thinking beyond the no homeless equals no shortage paradigm.

        You dont have to be a spruiker to think we need more housing in a range of configurations for our current rate of population growth.

        Unfortunately, a lot of people have difficulty with the idea that the size of a household varies depending on affordability and the decision to form a new household can be affected by price. Thus you dont need homeless people to have a shortage of houses at high prices.

        As prices fall (for any number of the reasons discussed at length) there will continue to be a shortage until the ponzi pricing margin dissolves and prices revert to mean.

        What the shortage deniers fail to understand is that they are playing right into the hands of those who wish to keep the dream alive by restricting new supply.

      • Current rate of population growth? What the? Our emigration is peaking and the biggest group to leave are the young professional, that is right, the potential home buyers.
        All this mad as batpoo shortage is annoying.
        22% of our homes are lone occupants and 80% of them have 3 or more spare bedrooms. Please land here on the home planet and take a look around….

      • Pfh007 has made one of the smartest posts ever on the subject of shortage.
        The housing situation is a little too complex to be understood by a person who can only think in black and white.
        This is why they respond with their chants and their abuse. (willynilly is a good example of that)
        Lone occupants and spare bedrooms have little to do with the shortage Paul.

  4. Just Dismal 2

    If we pay capital gains tax on homes, how can we afford to simply move house?

      • Sorry, misread your question. Didn’t realise you were talking about what would happen if we had to pay capital gains tax.

    • Because if capital gains were added, speculation would be curbed significantly, meaning gains would be a lot lower. People could buy houses if they need to, rather than as a speculative ‘investment’.

      • drsmithyMEMBER

        Because if capital gains were added, speculation would be curbed significantly, meaning gains would be a lot lower. People could buy houses if they need to, rather than as a speculative ‘investment’.

        I’m highly sceptical of the implication that lots of people are shuffling PPoRs for speculative purposes.

        I have no problem with CGT on investment (and especially “investment”) properties. I don’t see how it can be anything other than a brake on mobility when applied to the PPoR.

      • I’m highly sceptical of the implication that lots of people are shuffling PPoRs for speculative purposes.

        When I see in pretty expensive suburbs, such as South Perth and Subiaco, where a guy will buy the neighbours house when for sale, so he can knock it down and make it the tennis court, so the land becomes part of the PPoR and CGT exempt, you know land banking as such is thought to be a good pay off.

      • drsmithyMEMBER

        When I see in pretty expensive suburbs, such as South Perth and Subiaco, where a guy will buy the neighbours house when for sale, so he can knock it down and make it the tennis court, so the land becomes part of the PPoR and CGT exempt, you know land banking as such is thought to be a good pay off.

        I think calling that “land banking” is drawing a long bow.

        As, again, is the implication enough people are doing it that everyone else should have to suffer the disadvantages to try and catch them. I doubt many people can afford to buy their neighbour’s house and build a tennis court, nor that doing so would add more value than it cost.

      • dumb_non_economist

        RP, buying the block next door wouldn’t bring it under the same title as your house, regardless what you did with it. I’d have thought you’d have to combine the title and when it came time to get your CG you’d have to subdivide the block.

      • George Locust

        If capital gains on PPR were introduced i think there would need to be a simultaneous change to the tax code limiting mortgage interest deductability. As things stand, people could claim a tax deduction for paying interest on the family home mortgage if it were redefined as a taxable asset.

      • Hang on. CGT should be on the PPOR is sold within 10 years. No exemption for 12 to 36 moths and sliding up. We need this now to stop the fraud that is house flipping by people on their PPOR every 12 months. Of course exemptions would be available for health, work or babies and not be very difficult for the ATO to enforce.

      • drsmithyMEMBER

        Hang on. CGT should be on the PPOR is sold within 10 years. No exemption for 12 to 36 moths and sliding up. We need this now to stop the fraud that is house flipping by people on their PPOR every 12 months. Of course exemptions would be available for health, work or babies and not be very difficult for the ATO to enforce.

        10 years is a mighty long time in today’s world. I’ve moved either internationally, interstate, or from one side of a major city to the other 6 times in the 17 years since I left home, and I can’t think of anyone I know who hasn’t done similar moves at least 3-4 times in a similar timespan.

    • Asset Parice inflation targeting of zero.

      Houses, a non productive, non-tradable manufactured item, to stay at the same price for perpetuity.

      No capital gain = no capital gains tax.

      Problem solved!

  5. Well, Chris V certainly dropped a thermo-nuclear in the middle of MelbRE vested interest. And as a good journalist, he gave them an opportunity to air their side of the story and they were found wanting.

    “Seventy per cent of 35-year-olds cannot access home ownership at this point in time. Twenty-two per cent of Sydneysiders own 55 per cent of homes.”

    That is taxpayer subsidized oligopoly or should I say, Kleptocracy? Un intended consequence of this is gen x/y never ever leaving their parent’s home.

    • Agree. This has been a generational scam that has absolutely smashed the younger generations. For all the constant posturing by politicians there is never a meaningful response to the fact you have just raised.

      The younger generations need to get smart and not buy into the scam – there are many other great options than a life of debt servitude.

      And the country will be all the better for it.

      • Totally agree aj.

        The damage that this situation has done needs to be understood.

        I have a young relative who married at the age of 23, she was encouraged to get her foot on the property ladder by parents, “rent is dead money”.

        She and her husband were paying $390 rent per week for a very acceptable unit. In total $1690 per month.

        Armed with the wisdom of parental advice coupled with the deadline for the First Home Owners Grant off they pop and get a 95% mortgage $500k.

        Using the FHOG and nominal savings to pay a deposit on a new build.

        Their combined income was about $100k.

        Now they are paying $2750.00 per month on $500k and the house next door which is exactly the same has been on the market for 12 months at $410K.

        Presently they now have negative equity of $80k and the fall is just starting.

        So we have a young couple and I suspect there are hundreds of thousands more who will be a slave to debt and whose only way out is to dedicate a major part of their life to debt reduction.

        This is not what this country needs and the policy of supporting a property stimulus through the FHOG will rank as a decision that may have ruined the lives of many young Australians for many years to come.

      • Presently they now have negative equity of $80k and the fall is just starting.

        The stupid, it hurts!

        Sorry to be so harsh, but life’s tough.

      • MsSolarFelineAU

        “This has been a generational scam that has absolutely smashed the younger generations.”

        Correct – but, only if we let smash us. 🙂

        The younger generations need to get smart and not buy into the scam – there are many other great options than a life of debt servitude.”

        Live at home with the fogies (if you can) SAVE $$. Spend the $$ on productive assets (spend money on things that will _make_ you $) and _anything_ that will generate an income FOR YOU. Spend $ on things that will make you happy. (What’s the point of being a miserable saver?)

        I’ve posted this before, but I’ll repeat myself – regarding this faux housing-shortage, I’ve moved in with the old duck (TWO _seperate_ households MERGING into ONE) If this scenario is MULTIPLIED thousands of times in Australia, would the NUMBER of households be DECREASING??? (There is _only_ one correct answer to this). Do not add importing people/overseas students to keep the housing ponzi scheme going (immigration) to the numbers. And the importation of people/immigration has been declining as well. Emigration figures have been increasing. See willynilly’s post above.

    • The Patrician

      I am all for equal time for the spruikers when they come up with gems like this.

      ”There’s no reason for concern. The stock on the market tells you nothing about the fundamentals. It’s underlying demand that matters. Melbourne’s new homes market is in good shape,” said HIA economist Andrew Harvey.

      que?

      • Mining BoganMEMBER

        Yeah, that was my favourite.

        I had to read it three times. Finally got up to get my glasses. Came back and read it again. Still said the same thing.

        Andrew FTW!

      • The Patrician

        I can see the smile on Chris V’s face as he slipped that in as the closing quote for the story.

        Gold.

      • TP, that Andrew Harvey statement reminds me of the Mark Twain quote :

        “Better to keep your mouth shut and be thought a fool than to open it and remove all doubt.”

        My point is that not even a fool would take HIA’s assertions at face value.

      • I am sorry AB. That position has already been taken by APM’s Dr Andrew Wilson.

        Maybe Andrew Harvey can apply for the role of Donald “unknown unknowns” Rumsfeld.

      • MsSolarFelineAU

        There. Is. NO. Underlying. Demand.

        And, not at these *prices* anyway!

        Quite a few friends of mine who live in Melb, live with their parents already, have just moved back in, or happy with their renting-lives.

  6. A blizzard of negative housing stories are coming out of Fairfax – at last.

    The mining boom (cue trolls) masked the weak conditions in metropolitan Australia but hasn’t stopped the irresistible unravelling.

    Only an action as sweeping as Steve Keen’s Debt Jubilee can save us from joining the rest of the western world in depression.

    It didn’t need to be like this.

    If we taxed the natural endowment (land, minerals, licenses) rather than wages and business our envied position would indeed be enviable.

    Don’t Buy Now!

    • darklydrawlMEMBER

      Well they (fairfax) are on a roll this week. This morning (Monday) we have this

      http://theage.domain.com.au/real-estate-news/home-owners-facing-loan-repayment-disaster-20120708-21pkl.html

      and in the Domain section no less.

      Folks really must be starting to get nervous (and with good reason) – Hell, for Melbourne the writing has been on the wall for at least 3 years now.

      What I really liked about Chris’s article is it was one of the few that actually named the suburbs with the highest percentages – rather than just a flat percentage for ‘Melbourne’.

      Great stuff. Somehow though, I suspect Dr Wilson will be giving him some greasy looks over their Morning coffee in the Fairfax Caf! 😉

    • I fail to see how a debt jubilee will dissuade people from bidding up prices in a new bubble.

      • It doesn’t. A debt Jubilee would rescue those already in debt slavery and reduce the magnitude of a debt depression. Unless it was a regular event. A debt jubilee every 15 years would change the scenery a lot. But it’s not the method I’d use.

        To stop the cycle you need other measures. Like a broad base land tax, killing negative gearing, universal capital gains tax.

      • Need to get rid of rent assistance as well as this is another market manipulation. Currently 41% of renters recieve it.
        Maybe a phased withdrawal via wealthly postcodes first together with changes to negative gearing.

      • My understanding is that rent assistance was put in place for welfare recipients in recognition that public housing was inadequate for demand, and not keeping up.

        But I agree that it is a market distortion, as I guess was the public housing that preceded it.

      • One of the reasons for negative gearing was so that the government would need to supply public housing, it seems to me to be a double up, help the banks by encouraging debt and then help the banks by ensuring the income is always coming through for the tenant.
        As I said maybe in postcodes that have a high per capita income and phase it in, whereas new suburbs it stays for longer, or in areas that you need to attract workers like the mining areas

      • +1 !

        Debt jubilee is like hitting reset on a computer with faulty software.

        We still have fractional reserve central banking ponzi nonsense, and you’ll just encounter the same problem again and again.

        Banks will inflate the money supply together, credit will be directed less towards productive activities and more and more towards speculative activities.

        Even if it isn’t property, it could be real estate, commodities, energy, food, resources.. take your pick.

        In order to really restart the system, we need sound money and balanced budgets. The gold standard is looking like a great candidate.

      • George Locust

        I respect Steven Keen but the idea of ‘Debt Jubilee’ reeks of moral hazard.
        And how does it improve affordability for would-be buyers?

      • Professor Keen’s modern debt jubilee idea would scar the banking system so badly that it would take generations for another asset bubble to build up.

        Of course, we humans never learn from our mistakes, so another housing bubble in 2060 is likely 🙂

      • Debt jubilees were commonplace throughout history. One way or another, we’re heading for our own one.

        The Book of Leviticus provides that every 25-50 years there will be a Jubilee, where all slaves and prisoners are freed, sins and debts are foregiven and property returned. Later Pope Boniface VIII decreed that a Jubilee shall take place every 50 years, and that extraordinary Jubilees would be decreed when necessary. If ever there was a time when the world needed an extraordinary Jubilee, it’s now!

      • SK The PILL would work
        Extract

        Property Income Limited Leverage
        Some debt is needed to purchase a house, since the cost of building a new house far exceeds the average wage. But debt greater than perhaps 3 times average annual wages drives not house construction, but house price bubbles.

        Property Income Limited Leverage (“the PILL”) would break this positive feedback loop by basing the maximum that can be lent for a property purchase, not on the income of the borrower, but on a multiple of the income-earning potential of the property itself.

        With this reform, all would-be purchasers would be on equal footing with respect to their level of debt-financed spending, and the only way to trump another buyer would be to put more non-debt-financed money into purchasing a property.

        It would still be possible–indeed necessary–to pay more than ten times a property’s annual rental to purchase it. But then the excess of the price over the loan would be genuinely the savings of the buyer, and an increase in the price of a house would mean a fall in leverage, rather than an increase in leverage as now. There would be a negative feedback loop between house prices and leverage. That hopefully would stop house price bubbles developing in the first place, and take dwellings out of the realm of speculation back into the realm of housing, where they belong.

        http://www.debtdeflation.com/blogs/2012/04/16/inet-presentation-minskian-perspective-on-instability-in-financial-markets/

      • mrobbo, the PILL would only work for a couple of generations. After a while the dangers of debt will be forgotten and LVRs would ramp up again. Rinse and repeat 🙂

    • I would prefer macroprudential policy.

      Say a contemporary cash rate at 2.5% (1% less than bnow, but adjusted by RBA ccording to needs)

      A 1% levy on top of this for PPoR mortgages

      A 2.25% levy on IP.

      Everyone BUT grandfathered purchasers of property get to benefit, they must forego consumption.

      Lower business rates, collected revenue from these levies cut business tax.

    • David, the problem with a debt Jubilee, is what would stop people just adding more debt after the event?

  7. GunnamattaMEMBER

    Another piece today

    http://theage.domain.com.au/real-estate-news/home-owners-facing-loan-repayment-disaster-20120708-21pkl.html

    My wife and I went for a cruise yesterday to Daylesford and Ballarat (and the latter would have some of the cheapest housing going in Vic) and we couldnt help but note how expensive housing was (she had the ipad out while we were driving) circa 100 klm from a major city (which isnt actually cost competitive on anything it does at the moment).

    There is no way known we are shelling out for a home at the moment. I would go back overseas and work for another year or two rather than buy now.

  8. the sudden change from under supply to over supply is simply laughable. For my part I would never buy out in the sticks (why do this? I could buy in the Sunshine coast for a similar price and be just as convenient to a major city). It will be interesting to see what happens to inner city areas, there will always be demand there, but like anything, demand is price driven. I think there is definately a ripple effect from outer to inner suburbs. Steve Keen alluded to it in the context of the FHOG extensions ie 10gs in a FHBs hands allowed another 50gs of mortgage based on 20% deposit. The seller took this 50gs which allowed another 250gs of debt to buy a better property etc etc etc. I dont know that the equation is quite as linear as Steve suggests (due to servicing costs on large mortgages) but it does suggest there is a strong relationship between outer and inner suburbs despite what some may think. The relationship is indirect as well (ie banks will lose equity base as outer homes drop in value, means less to lend to inner suburb purchases). So for now I will wait on the sidelines in my inner suburb house I am renting at a gross yield of 2.2%.

    • GunnamattaMEMBER

      I grew up in the sticks so I dont have a problem with the idea. But I agree strongly with what you say about the Sunshine Coast – I have sussed out there, and have seen prices down by maybe about 20% over the last couple of years, but I still dont think it is a goer yet mainly because I think that a lot of the places there are actual investment properties and that the step down (price wise) will come should the owner conclude that it is costing them money to keep them.

      • Mining BoganMEMBER

        Yes, how to convince the average, garden variety NG ‘investor’ that their loss making ‘investment’ is losing money.

        It’s harder than you think.

      • “Your loss making investment is making a great big loss sell now or lose it all”

        Hmm is that hard to say?

        No, for us but we’re not “believers” of the great 7 year doubling we’re the fools that stayed off the Boom Bus.

        Well NE + NG what a formula for spilt milk and the blame game to come. Que iSad.

        Oh dear.

        🙁

        TM.

    • Of course the prices in inner suburbs will go down after the fringes fall.

      It is sadly funny when you read the comments section on these articles in MSM (and also from from the resident spruikers here). They always go like:

      1. Australia is different, as solid as houses.
      2. Bubble, what bubble? Perhaps may be in the bushes but not in the cities. Dont you know we have shortage?
      3. Prices are stabilising, going sideways and you should not worry about it, it is a part of life.
      4. Dont you dare to talk down the housing!
      5. Well, western suburbs are a wasteland, of course the prices are correcting. But eastern suburbs are golden, they are so leafy and we need leaves to eat!!11!! So buy buy buy.
      6. Oh outer suburbs may not be as lucrative at the moment. But inner suburbs is what makes Melbourne the most livable city in the world, dontyaknow??!!11!! Other parts may be correcting, but inner suburbs are always on viagra!!!
      7. And so on.

      Corrections, my ass!

      • Coolnik,

        I agree I am not sure how to write this but as the ripples of pond rolled out with the inflating property prices the reverse will be true the outer suburbs will suffer hardest first.

        I am positive Leith has covered this.

        God love MB and all the commentators here just awesomeness!!!

        I do feel for the ones that are now in NE … this is not good for our economy but like Lemmings they all made a bad Disney movie about the assets always go up mantra … instead they were corralled and forced over the edge of a very-very high cliff.

        Damn you Disney … oops I mean RE vested interests.

        TM.

  9. In the US, “months of supply” seems to be a common metric – i.e. number of houses for sale divided by number actually sold in any given month. Again, in the US, this seems to have gone from a historical average of 3-4 months’ supply to a peak of 12-13 at the height of the meltdown (national figures, as far as I can tell).

    Has anything like this been calculated for Australia? Because some back of the envelope calculations based on existing data (SQM for stock on market, ABS and HIA for new home sales/new mortgages created) gives me something like 2+ YEARS of supply nationally, as of right now. I’d love to see a more rigourous analysis of the supply situation in Australia.

    • That doesn’t sound right (2+ years supply).

      Latest volume data from RP Data suggests nationals sales tracking a little under 400k properties per annum. Stock on market varies depending on who you ask (SQM Research 385k, RP Data 310k), but I haven’t seen any data which would indicate greater than 12 months supply.

  10. The Patrician

    The below part of the AFR piece is one of the best summaries I have read of how our crazy tax settings distort the market…coming as it does from the mouth of the billionaire benificiary of the craziness

    “Current tax arrangements also enable developers to greatly minimise their tax by keeping properties empty and not developing their land holdings.

    Apartment billionaire Harry Triguboff was surprisingly candid at a lunch held by the American Chamber of Commerce last October.

    He told the audience he was able to pay “very little tax”.

    “I keep a lot of my properties. And if you keep them and there’s capital gain it’s beautiful,” he says “You don’t pay tax. I don’t lease them so I don’t pay tax on the rent, but I get depreciation.”

    He paid tax on apartment sales but that’s where the land banking came in.

    “You have to buy lots of empty land,” he said. “You keep the land and it brings you no income, so you claim it against your tax.”

    Is this not the core of the problem?

    • GunnamattaMEMBER

      That is it on the nail.

      But the other end of that same problem is the number of punters who have bought into housing over a generation in lieu of a pension. Which effectively has them holding potential market entrants to ransom.

    • “You have to buy lots of empty land,” he said. “You keep the land and it brings you no income, so you claim it against your tax.”

      Wow.. I didn’t even realise this is possible. Even more reason for simplification of the tax system if stuff like this can be exploited.

      • That’s garbage. How could you offset the supposed loss from a piece of ’empty land’ if it isn’t generating income? I’m yet to see one provision that says I can buy a piece of land, hold it and offset it against other taxable gains. That is why investors buy properties that generate income (albeit crap incomes these days). If it doesn’t generate income you cannot offset losses against anything.

      • “You don’t pay tax. I don’t lease them so I don’t pay tax on the rent, but I get depreciation.”

        This is idiotic at face value. The only reason he would pay tax on the rent is because he is earning income.

        “I don’t earn any money so I don’t pay tax on my income.”

      • I wondered about the same text and read the article. The quote was from billionaire developer Harry Triguboff, not a property investor claiming to be negatively gearing a vacant block.

        He and other developers probably have access to tax write offs which most property investors don’t.

      • I expect what he’s saying is because he’s running a development business the interest expense on the land-banking is tax-deductible.

        Cf mum and dad investor where the vacant land is a capital asset and the interest would only be able to be off-set against the capital gain on the asset in the future.

    • PAYG Salary earners are the chumps of the tax-system that’s for sure.

      Australian political parties are just owned by the corporates.

    • Right on the money, Patrician. People who are asset wealthy are able to make the tax system work to their advantage, sometimes by having no tenants at all. That’s why we need the broad-based land tax that others have been talking about.

      I’ve noticed myself particularly with commercial property that many landlords prefer to leave it empty if it suits them – the same goes for residential sometimes. It’s a stupid situation and it favours keeping productive assets locked away to minimise the tax of wealthy individuals who own multiple properties. Surely this is one thing that will have to go eventually?

      • The Patrician

        …go eventually? Fix it now.

        If, as we are told constantly, lack of productivity is the big economic boogie man facing this country, surely the above is one of the biggest (and most fixable) blockages to productive use of our available resources…..unless someone wants to argue otherwise.

        Maybe MB should ask HRH to explain how encouraging him (through our tax settings) to bank his apartments and lock up huge tracks of vacant land, improves this nations productivity.

      • George Locust

        The Chinese are notorious for buying property then leaving it empty to preserve the “as new” condition.

    • Alexandra ChapmanMEMBER

      I too thought this was a stunning “reveal” by Triguboff.

      Which makes you wonder exactly how it is that he makes money – because he has also (via Robert Gottliebson at Business Spectator) revealed that he sells 80% of his inventory to mainland Chinese investors.

      From what it seems – Triguboff’s whole business model is based on using the various quirks in the tax system.

      Which then leads to the even more obvious question and perhaps someone can help me out here.

      My understanding is that overseas investors under FIRB rules are not allowed to let their properties out, ie the property is for their personal use only. So if Harry is building massive numbers of apartments – which he is – and selling 80% of them to Chinese investors – then presumably he is keeping portion of the 20% – the remainder un-let for tax reasons.

      In which case, as his business model relies on capital gains for him to increase wealth and tax deductions to deliver revenue, what happens when the model stops working?

      Do we suddenly find a massive number of apartments either hitting the rental market or the sale market?

      I can’t even begin to think through the consequences. Perhaps someone else can oblige.

      • The Patrician

        “I can’t even begin to think through the consequences”

        I can think of one.

        A more productive use of resources.

      • The Patrician

        But on a more serious level Alexandra, Triguboff is but the high profile tip of a very opaque developer iceberg.

        This area needs serious investigation both by heavy duty financial journalists and ultimately the productivity commission and parliment.

        Any suggestions on the journo?

      • Kate McClymont from SMH.

        She did some good work re Tripodi, Badgerys creek. Interesting issues now going on with the Tigers redevelopment at Rozelle, with some interesting connections, ie tripodi again.

      • Kate McClymont from SMH.

        +100 .. One of the few journos (incl Michael West, Chris Vedelago, John Garnaut etc) articles that still persuade me to read SMH.

      • The Patrician

        The challenge is they would have to withstand sustained attack from Gotteliebsen et al. Financial credentials would have to be impecable.

      • When the model stops working he hits on his mates in the media to lobby for more handouts and no doubt he’d be hitting up his pollie mates aswell.

      • FIRB rules about not letting is for temporary residents buying existing property. I dont think it applies to new property investments bought by overseas investors.

      • SchillersMEMBER

        FIRB rules now allow foreign investors to buy as many new properties as they like, with no obligation (or penalty) to rent/let or live in them. Many wealthy Asian investors are buying Triguboffs apartments as a safe haven for some of their considerable wealth. Many remain vacant. Note that prior to changes in the FIRB rules in late 2009, there was a 50% limit on sales of new dwellings in new developments going overseas. It seemed to work well with the expensive half going to wealthy foreigners and the more affordable half sold to Australians. You can forget that now as up to 90% of new apartment sales in Sydney and a good whack of them in Melbourne are sold off shore. How all this aids “affordability” is beyond me.

      • Yep, I am aware of them and I have repeatedly pointed out that this is an unsustainable business model that the developers rely on.

        How long will the o/s investors keep the apartments empty? At some time, they will have to sell it or rent it to a local resident and add to the supply. They can’t possibly ship it back to China.

        Nothing wrong with FIRB rules allowing o/s investments. But government should close the business visa loophole where rich (and possibly corrupt) o/s residents can buy permanent residency and citizenship.

      • intersting. Seen TV item in weekend on masses of Foreigners buying off the plan apartments (example was macquarie park in Sydney)as investment.
        From FIRB website. NEw off the plan can be rented out. But once apartment purchased, it becomes second hand and thus can only be purchased by locals or Foreign Temporary residents whom intend to live in it themselves, and must be sold once they leave (cannot be rented out – not legally anyway).
        Only catch is that many of these see investment as long term (very long term by Austalian standrds), so are not so interested in selling, but holding as an investment store. I see this as bit of a contradiction in Apartments which by thier nature you’ve bought the depreciating real estate investment without the underlying land.

      • “From what it seems – Triguboff’s whole business model is based on using the various quirks in the tax system.”

        Many businesses are formed around this meme – a lot of accounting practices eg. (I wonder, what if all those brigades of tax accountants instead worked for businesses as financial accountants – massive boost to productivity….), financial planning firms etc.

        The meme extends to media, where the same is applied to the “quirks” in copyright laws. Thankfully though, one can see the quality with the latter, whilst the former is more entrenched.

      • I don’t agree. A business model can be “enhanced” using legal tax minimisation techniques, but first there must be a profit.

        The business model must be strong enough to generate profits. Business models that don’t generate profits, or only generate very modest profits have no need to employ any tax incentives, although they still will.

        I would be quite certain that Harry is playing by the rules, and that will place him firmly within the company of every other successful business in Australia. I just don’t see how you can criticise anyone in any field of endeavour who plays by the rules. It’s a diabolical argument.

        Criticise the rules if you don’t like them, but not the players who are forced to abide by them.

      • drsmithyMEMBER

        Criticise the rules if you don’t like them, but not the players who are forced to abide by them.

        “Hate the game not the playa” ? That’s right up there with “just following orders”.

      • There’s a marked difference between criticising the local accountant’s office whose 90% of his revenue comes from doing tax returns he really doesnt need to do, but tax laws force his clients to comply with, and with someone whose very livelihood depends upon a politico-housing complex that he feeds/donates/supports/lobbies and can actually change tax, regulatory, population/migration and other policies to suit his agenda.

      • Chris, you make it sound as though Harry derives his profit from tax lurks, but in fact he derives his profit from building and selling.
        If he chooses to use legitimate deductions to enhance his after tax profit then he is only doing what everyone here would do in the same circumstance.
        I get back to my original point – if you take away the profit incentive to build high rise towers, you will detract from supply because Harry and others would no build them.
        The argument of bears here is not enhanced by stifling supply by reducing profitability. I find the notion that it would be argued to be so, quite a bewildering absence of logic.

      • The Patrician

        PF
        You still haven’t explained how providing tax incentives to HRH to landbank improves productivity.

        Do you want to have another go?

      • The Patrician – I never set out to prove or disprove that, I merely pointed out that the tax laws are naturally going to be used by everyone to lower their tax burden. that includes you and I.
        In all probability we should revamp our laws, but until we do Harry and the rest of us can only work with what we have.
        Really I don’t give a hoot about Harry and what he does. He is a big boy and I’m sure that he can take care of himself without my help, I just thought it was unrealistic to criticise any businessman who works within the existing tax framework and is above board. If you can find evidence of him or others working outside the law then I will very quickly join your criticism – but to the best of my knowledge no one has ever suggested that.
        Any business that produces anything does so with profit as their motivation. Land and unit development is about as risky as it gets in business, so to adopt punitive tax systems just for them will not bring you more housing at an affordable price, and I suspect that it will be highly counter productive.
        You may not agree, but please consider that thought.

      • The Patrician

        Still a “no” but at least you are giving it a crack.
        You seem to be confusing productivity with Harrys profits. It is understandable, productivity is a difficult concept to get your head around.

      • Land and unit development is about as risky as it gets in business,

        😀

        Not sure if serious.

      • Rusty – yes very serious. Because of our regular boom bust cycle, long lead times, and high interest rates for developers, development is a very risky business. Developers never know whether they will end up with a pot of gold or a bankruptcy petition.

    • Patrician – I suspect that Harry wouldn’t want to sell too many apartments in one financial year as his tax rate would be pushed too high. He will stagger the sales as it suits him.
      As a manufacturer of residential products, he is perfectly free to do exactly that, just as a tyre manufacturer or any other manufacturer.

      • The Patrician

        …and we through our democratically elected officials are perfectly free to remove the taxation incentives that encourage him to landbank.

        PF can you explain how the tax incentives HRH describes above improve national productivity?

      • Patrician – I don’t have to explain anything. I pointed out that HrH has some perfectly legal tax strategies that he can use to lower his tax burden – they are very well known rules that apply to all of us and not just to Harry.

        One could argue that if he couldn’t make a profit he wouldn’t bother to build them in the first place.

        Maybe there are not enough tax incentives to build more units and get them all to market as quickly as possible?

      • Patrician – I think that you should take that as an answer that didn’t suit you, but it looked well beyond your very narrow perspective.

        Think first, then blog.

        Cheers.

      • Dear Sir, you mention the regular boom and bust cycle. I say bs. Can you show me any data to support that property goes through a boom/bust cycle as no data I have seen supports such a view. Sure demographics may be a tailwind or a headwind, but regular (7 years I suspect) cycles are just complete bs.

      • Well It’s quite a novel experience to meet someone who isn’t aware of business cycles. Lets go back 50 years then shall we – let’s see on memory we had a recession in 1961, 1974, 1981, 1992, and 2001 although the 2001 recession was made shallow through a low interest rate policy in the USA.

        Just Google that for a chart. Let me know if you need any more information.

      • Defelection by a spruiker?
        We are talking specifically about house prices. Please provide the data and chart that shows a boom and then bust in house prices. My bet, is that you can not, as it does not exist. I even doubt that there is any correlation between the business cycles you mentioned and house prices. In God I trust, all others must bring real data.

      • Seriously willynilly – You call me a spruiker??? What am I trying to sell you??? I couldn’t care less whether you buy a house or not.

        Quote “This is Australia’s sixth recession since 1945. I’m old enough to recall the previous five: those of 1990, 1981, 1974, 1961 and, though it’s a distant memory, 1952”

        http://www.theaustralian.com.au/business/wealth/imf-looks-to-history/story-e6frgac6-1225708496512

        They don’t mention a recession after the Tech Wreck in 2000 closely followed by 911 in 2001 but it was only due to Greenspans policies, the economy certainly did go into a downturn.

        Recessions effect house sales even if you can’t see it in the historical median volatility, it was certainly happening on the ground at the time.

        This current recession is quite different to previous ones which makes it interesting, but it’s not out of cycle is it?

        Anything else you want to know while i have a couple of minutes to spare – “the meaning of life” perhaps?

      • So, there are no property cycles, just economic cycles that may or may not effect house prices. Got it.

      • Mining BoganMEMBER

        Me.

        The average punter out there will find my good self far more credible than any of the nerds that hang out here.

      • The Patrician

        I nominate Mining Bogan as the GFB* party candidate for the seat of Kennedy (Qld).

        *Gay FIFO Bear

        Incumbent – Bob Katter, Lib – Clive Palmer (likely)

  11. There’s been a pretty sizable bounce in house prices this month according to Rpdata despite the ever increasing stock on market. Melbournes response to the interest rate drops seem much greater than other states.

    Is Rpdata wrong? What explains such a rapid rise given the state of the melbourne market?

    • russellsmith55

      Hopefully it was just a few shmucks getting in on the FHOG before it expired, and not the heralding of a new class of shmucks buying into our property nightmare.

  12. Re Land banking some US states or it may be at a local govt level, levy a land tax at a higher rate if the land is not producing an income, in particular agricultural land.

  13. George Locust

    Add to that the tens of thousands of QLD public servants being retrenched. Apparently some of the bigger departments have been told they need to start cutting permanent staff, not just the temps and casuals.

  14. It was certainly an interesting report.

    The issue I can’t quite rationalise is how the numbers compare to the total number of homes. For instance in ‘Mernda/Doreen’ it said there were 3748 homes for sale. According to the ABS those two areas have a total of 5780 occupied homes.

    Even if you include the 9/10 % in addition which are unoccupied (and that’s in line with national average) then it means around 6 in 10 are for sale.

    Really?

    • How many are unsold, yet to be completed house and land packages? I know SQM de-dupes their data but often a builder will advertise two or three designs for a single allotment. I suspect the data will account for this, but nevertheless the volume guys will still fish heavily with their packages. Have a look at re.com.au if in doubt.

      Failing that as an angle, send one of the minions out to do a count. Lop 20% off the board count, then put out a media release ensuring all is well. As an industry it has worked a treat for years.

    • thomickersMEMBER

      some of the best retiree clients at my workplace note that they just love the peace and quiteness that hangs in the neighbourhood.

      They happen to live/retire in Doreen.

    • I have to agree Rob. I think that the SQM figures definitely need to be taken with a grain of salt, especially in suburbs with new estates.

      I don’t know exact how they can de-dupe listings like these without manually going through them all.

      http://www.realestate.com.au/property-house-vic-epping-110930615?listingType=buy

      http://www.realestate.com.au/property-house-vic-epping-110930591?listingType=buy

      http://www.realestate.com.au/property-house-vic-epping-110930471?listingType=buy

      Are these really part of the stock on market?

      • The properties you have listed here all leave out an address.
        I note there is approx 15% of properties in this postcode being advertised without an address.
        We pay particular attention towards listings without addresses in that they have to go through a very stringent filtering system in order to be counted into the aggregate. Without giving the game totally away, some of the filters include advertiser, property type, price,etc

    • Robert, our data actually covers the postcode of Mernda/Doreen (3754)

      For postcode 3754, the ABS reported 1363 dwellings in 2006. In last year’s census there were actually 6545 dwellings. That’s a very fast compounded growth rate of 36.9%pa!

      Now, given the fact that that census night was 11 months ago, I think it would be reasonable to suggest that more dwellings have been added to the postcode since then don’t you think?

  15. ”There’s no reason for concern. The stock on the market tells you nothing about the fundamentals. It’s underlying demand that matters. Melbourne’s new homes market is in good shape,” said HIA economist Andrew Harvey.

    The new Black Knight…
    http://www.youtube.com/watch?v=zKhEw7nD9C4

    • russellsmith55

      Haha spot on. Its hilarious that he’s suggesting ‘the fundamentals’ will support the market, while directing you to ignore the supply side of the equation (and also omitting the obvious lack of demand). I guess he’s talking about fundamental market forces other than supply and demand?

    • Yeah, I was totally perplexed with that one … so no turnover means there are great fundamentals?!

      Tell Coles and Safeway that, they would die without turnover … even worse for RE they need turnover to keep the lights on.

      And the RE market is the exact opposite to Fast Moving Consumer Goods (FMCG) that the supermarkets sell – same principle applies though. Housing is traditionally a slow moving high value – highly considered purchase.

      Back the the supermarket Meme: Stock on shelves to long, costs you money, thus you need high rates of turnover otherwise it gets quite smelly – but good smelly fundamentals.

      No turn over no income. But great fundamentals?!?!?!

      TM.

  16. sydboy007MEMBER

    I think it’s time we:

    * Have negative gearing on new housing for 10 years then it’s quarantined against the income of the property. If you can’t make money after 10 years then sell up.

    * Get rid of the tax fre status of the primary residence. You would need to grandfather this in the same way for the CGT.

    * Remove stamp duty and developer levies by introducing a broad based land tax – give up to a 10 year grace period for people who have recently bought their property.

    * Remove stamp duty on housing insurance, and have the fire levy added to the land tax or council rates

    I’ve yet to read an article that explains how increasing house prices is good for society

    • Go Sydboy! The grandfathering issue probably isn’t as serious as you think. Treasury could credit everyone for Stamp Duty paid and debit back a notional LVT on years owned to arrive at a scrupulously honest present value.

      We will need to make generous and fair provision for elderly owners who cannot meet a BIG NEW TAX!! and are unable to see the benefit of removing the 125 taxes on Ken Henry’s hit-list because they don’t pay them.

    • Re the CGT status on principal residences, you have a time and threshold level.

      You flip a principal residence within 5 years you pay CGT. The property is worth more than 1.5 million you pay CGT if the property has been held for less than 10 years.

      Interesting point though, the exemption of the principal residence for 6 years if you are renting it out and living in overseas or renting another premise was based on politicians forcing Keating to ammend the CGT legislation in 85. 6 years equals two terms of parliment.
      Its the same self interest why antique clocks are exempt.

      • Property taxes and in fact taxation reform should shift from encouraging asset speculation and the resultant debt to give more encouragement to actual production and income.
        We should be looking at the Swiss and Germans for our reforms in this area and that local government and regional government should be rewarded for increasing the productivity of their areas.
        Instead we have a taxation system that benefits from increasing asset values.
        Our banking system is so entwined with our taxation system it is scary.

      • RE THE CGT STATUS It should re that in regards to reform you have a time and threshold level. Currently there is no CGT on the principal residence.

      • drsmithyMEMBER

        You flip a principal residence within 5 years you pay CGT. The property is worth more than 1.5 million you pay CGT if the property has been held for less than 10 years.

        I hope you’re planning on indexing that $1.5m figure (or, better, making it a multiple of the median wage).

        As I posted elsewhere, 5 years is a long time these days. In fact, the last time I spent even 5 years in one region was when I was still a student living with my parents.

    • Yes, and do not forget a death tax for the value of an estate over $1million. The sperm lottery is hardly a fair distribution of wealth in an advanced society.
      You sound like another visionary thinker, good to see some solutions being proposed….

      • MsSolarFelineAU

        Sheeet, I just want a 50% GST and no other taxes….

        And, what about those of us who will inherit the assets of our ancestors??

    • drsmithyMEMBER

      Have negative gearing on new housing for 10 years then it’s quarantined against the income of the property. If you can’t make money after 10 years then sell up.
      I don’t understand why we need “unquarantined” NG at all. Pretty much every other country gets by just fine without it.

      Get rid of the tax fre status of the primary residence. You would need to grandfather this in the same way for the CGT.
      On this I disagree. As far as I can see, CGT on the PPoR just punishes people who either want or have to relocate and discourages them from doing so.

      The rest I agree with.

  17. Quite simply, doom and gloom is if house prices were to actually rise again and our own kids could never afford to buy a ‘home’.
    UE, you need to get this right as reporting that the MSM are calling it d and g is not the way to go.

    Make it so from here on in D&G is rising prices.

    • …and for many collapsing prices. Slow melt the preference, surely? Although now that MSM have a hold of the story all the punters they pushed ‘property’ to are likely to have the rug pulled by the same groupthink source.

      • Slow melt, yes, well that is what we are seeing on the home planet now. Denial and delusion, necessary to form a bubble will last even when the bubble has fully deflated. Many with negative equity now will continue to pay their mortgage, assuming they have a job, and wait for the up cycle like Peter Fraser talks about. It is bs. There will be no massive upcycle coming.
        Quite simply, regardless of what the MSM say, the D&D will always be there while the sun shine on the lucky generation. I am also not sure that the MSM are solely to blame for pushing FHB;s into the market. Easy credit, boomers and bankers would be first on my list.

  18. LOOK, the massive failure of analysis that is going on all over the world re the issues of housing “supply” versus demand, is that it is focusing on NUMBERS OF PEOPLE relative to numbers of homes, instead of WHAT THE PEOPLE CAN AFFORD relative to the PRICE of urban land which is being determined by SPECULATION and gaming and regulatory quotas.
    I said this on the thread a few days ago where experts were comparing China and Spain; the experts said prices in Spain could not crash because there was a near-unlimited quantity of “customers”. The same is being said about China now.
    The endless NUMBERS of potential buyers, whether retired people moving to Spain or Chinese rural or slum dwellers, is irrelevant to the sustainability of price rises in property, what matters is the price these people can AFFORD TO PAY.
    If 1 million houses are all on the market for $1 million dollars each, and vendors are refusing to take anything less because of irrational expectations, it does not make a scrap of difference whether there are 1 million potential buyers with an income of $20,000 per annum, or 2 million potential buyers with an income of $20,000 per annum, or 10 million potential buyers with an income of $20,000 per annum, or 100 million potential buyers with an income of $20,000 per annum.
    NONE of the 1 million dollar houses are going to sell to actual potential occupants until the price has fallen to well under $200,000. The reason the price might be so far out of whack with the fundamentals of national income levels, is simply that the supply of land for urban development has been limited sufficiently that the price of urban land has been set by speculative mania on the part of people who are NOT actual potential occupants at all.
    The empty homes (and China is awash with empty apartments even as the slums are bursting with people) are all owned by “greater sucker” speculators who have probably paid $900,000 to a “lesser sucker”.
    NONE of this stuff NEEDS to happen as long as there is farmland in the world worth a few thousand bucks an acre!!!!!!! As long as anyone can buy some and build something on it without having to deal with a de facto mafia in City Hall, it is unnecessary for any city anywhere in the world at any stage of economic development, to have housing median multiples over 3.
    The above figures by way of example are exaggerated and based on China, but get my POINT. Australia is the same thing only on a different scale with different names and faces. So is the UK. So is Vancouver and a couple of other cities in Canada. So is NZ.
    Take a walk around and spot the empty “investment” homes; track down the vendors and ask them what is the absolute minimum they will sell for. Then canvass a few 27 year olds still at home with mum and dad, or flatting with 10 others, and ask them what is the absolute maximum they can afford to pay. Problem evident to anyone with half a brain.

    • “As long as anyone can buy some and build something on it without having to deal with a de facto mafia in City Hall, it is unnecessary for any city anywhere in the world at any stage of economic development, to have housing median multiples over 3.”

      +1

      Now let’s talk about single incomes and start to create a real family society again. It is not new news that women have babies and become mothers.
      Say 4.5 times single income?

      • MsSolarFelineAU

        “Now let’s talk about single incomes and start to create a real family society again. It is not new news that women have babies and become mothers.
        Say 4.5 times single income?”

        But, how would the Vested Property Interests make their $?? /sarc ON

        Anyway, whilst we women are doing the most important job in the world, we can _always_ be at home tapping away at a keyboard, keeping an eye on our most important assets, and working using the internet and increasing our family income.

        And, who said you guys cannot be the house-hubbies?? 😉

      • +1. When I say women, I also mean men. I was a house hubby for two years, however due to breastfeeding, my wife did the first two years.