Share on Facebook Share on Twitter Share on Reddit + - In New York, Hockey defends housing bubble By Houses and Holes in Australian Economyat 7:10 am on October 15, 2013 | 79 comments Find below Joe Hockey’s latest effort in New York in which he declares a US default “inconceivable”, talks G20 and defends the Australian housing bubble, which outsiders just “don’t understand”. It’s different here. 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Pfh007MEMBER October 15, 2013 at 7:22 am At the rate he is going he will be World’s Greatest Treasurer by the end of the year. marked64 October 15, 2013 at 7:28 am No housing bubble here. Watch us pump immigration to a million a year and constrain supply even further if it looks like blowing up. “But it now takes us 5 hours to get to work!” “You should thank us, you didn’t even have to renovate and your 3 bedroom house in Parramatta is now worth 6 million dollars.” Ortega October 15, 2013 at 7:31 am She doesn’t look convinced by Hockey’s response… “we have a very generous migration program”. Watch as she squints, nods, and pushes out her lip. Maybe she’s coming onto Joe?? Nah…. hehe. I’d sell the Sydney pad while the going is still good, luv. You’ve just heard our treasurer say “were different, you don’t understand”. reusachtigeMEMBER October 15, 2013 at 7:39 am But he is absolutely correct no matter how much you don’t want to believe it! We need lower interest rates, we really do! Ortega October 15, 2013 at 7:59 am I agree, dollar is still high and house prices will stagnate then head lower next few months, cant see current push going on for long. Interest rate cut in December? Just in time for Xmas. GunnamattaMEMBER October 15, 2013 at 7:36 am ‘Its a very different asset class’ reusachtigeMEMBER October 15, 2013 at 7:37 am Come on people. Surely by now it is obvious that we are different. We’ve all been trotting out this contrarian rubbish of an argument for years and have always been wrong. Capitulate now and accept it for what it is. An undefined beast! Don’t get onboard of course. flawse October 15, 2013 at 8:44 am “Surely by now it is obvious that we are different” The two key comments on this thread are this one by Reus and the conclusion by tetama below. “Surely by now it is obvious that we are different” Yes we are. What other nation on earth has as high a natural resource base per head of population as well as being an extremely desired destination for migration? These things are make us very different. Then tetama says below “We are a decadent society” There are other decadent societies but I doubt there are any more decadent. Our decadence means that we are willing to flog off, to anyone who wants them, any of our given natural resource assets, including mines and agricultural lands, as well as any and all of any industrial base that may have been bequeathed to us by our forebears. We sell these assets purely to finance our current consumption. In the process, just to indulge our over-consumption, we sell the future of our children. So this can all go on for as long as we can keep flogging assets to cover the gaps in the external account. Decades? I don’t know! What I do know is that we don’t care! So again as tetama says “We are a decadent society” The answers lie back in time. P.S. If anyone knows the commentator Bill Edwards would they please advise this writer. reusachtigeMEMBER October 15, 2013 at 9:02 am Exactly! Hence why we will deserve any comeuppance that may come our way, if it ever does. The Patrician October 15, 2013 at 7:40 am Oh dear… A very public admission to government sanction of and reliance on the immigration Ponzi growth plan….. and …rising house prices make houses more affordable? The stupidity of the statements is breathtaking. Pfh007MEMBER October 15, 2013 at 8:04 am Hey TP don’t be too mean! 3d1k was complaining yesterday that Joe should be given a protective bubble for 12 months to give him a chance to learn his job. http://www.macrobusiness.com.au/2013/10/joe-hockeys-economics-of-exceptionalism/#comment-287081 Supportive, confidence building self-esteem enhancing suggestions are what are required. Let’s show the boy in the bubble a little bit of love. If the ALP grow a brain, yes I know it is asking a lot, this term of government might not be the bore-fest it appeared a few weeks ago. Having said that , that chump Howes was in the AFR today talking how the ALP should rush to support Abbott’s plan to transfer ownership of capital assets to foreign buyers. Poor goose does not know the difference between tariffs and capital controls. And he represents industrial workers! Hope they have good career planning assistance. The Patrician October 15, 2013 at 8:39 am How is that housing summit looking Pfh? Apparently constricting supply is all part of the plan. Pfh007MEMBER October 15, 2013 at 9:11 am “How is that housing summit looking Pfh?” Yes – Joe seems very excited about slow housing supply and the opportunities it presents for houses prices while he and Abbott ‘generously’ drive up migration. The National Summit is still a goer but the builders, retailers and other industries that would benefit from an efficient and flexible residential construction industry may need to run it. The Boy in the Bubble seems determined to pump his up and float towards the sun. 3d1k October 15, 2013 at 10:35 am And I’m still there Pfh! Seriously what did the cohort here think Hockey should have said? A Treasurer from some Antidopean outpost interviewed on Big Telly is gonna tell the US how he sees it in frank terms; after a week or two in government tell his home audience they’re in the midst of a property bubble and in the fashion if the previous government announce some ill conceived policy on the run? Offend the ally and frighten the chooks. Yeah, good one. Pfh007MEMBER October 15, 2013 at 10:54 am 3d1k, Well when it came to everyone else he was positively crowing about the need to live within one’s income yadda yadda – so not sure which bit you thought was Joe being cap in hand to Big Bro USA. “…announce some ill conceived policy on the run” Really, you mean Joe did not actually work on policy to address housing while on the opposition benches. What was he doing? What he could have said is something along the following lines “House prices have been rising and that is not surprising as the previous government encouraged a high level of migration, a relaxed approach to foreign investment but did little to improve the efficiency of land and housing markets. We will be holding a national summit on new housing construction to increase the supply of land to reduce the pressure on house prices and lower costs right across the economy. We recognize that in a country as large as Australia with a small population low cost land for business and housing is a real competitive advantage” Perhaps he can use this for his next international interview. 3d1k October 15, 2013 at 10:58 am Lol. National summits are so last government 😉 Pfh007MEMBER October 15, 2013 at 11:15 am True – I made a video of the Rudd 20-20 summit – about 5 hours of it. Excellent for those occasional bouts of insomnia. Could be useful in Gitmo for extracting confessions quickly. Perhaps Assad would give up his chemical weapons if we gave him a copy. MavMEMBER October 15, 2013 at 8:34 am Say what you will.. He’s getting close, but he isn’t there yet. He hasn’t gone on national TV and told housing bears to commit suicide ala former Irish PM Bertie Ahern. The Patrician October 15, 2013 at 8:37 am No wonder Saul Eslake was so pessimistic about the prospects of reform. Jason October 15, 2013 at 8:46 am Yup. It’s clear that he understands the warped ‘fundamentals’ propping up the market, and he doesn’t want to do ANYTHING about it. The biggest challenge for Sloppy Joe will be to resist the lobbying from the FIRE sector for more “innovation”. flyingfoxMEMBER October 15, 2013 at 8:48 am The biggest challenge for Sloppy Joe will be to resist the lobbying from the FIRE sector for more “innovation”. Why would he considering he does have a vested interest in the FIRE and property sectors … flawse October 15, 2013 at 9:15 am Yep as per ff…there will be no challenge! AB October 15, 2013 at 9:24 am “The biggest challenge for Sloppy Joe will be to resist the lobbying from the FIRE sector for more “innovation”.” Yes, his wife will be whispering in his ear each night as they go to bed. http://www.heraldsun.com.au/news/treasurer-joe-hockey-and-financial-guru-melissa-babbage-have-a-very-modern-political-marriage/story-fni0fiyv-1226645854591 For most political families, a high profile spouse means someone has to take a back seat. But the Hockey-Babbage partnership is a very modern political marriage. For many years, Babbage juggled three children and a big job as the head of the global finance division of Deutsche Bank. It wasn’t always easy, despite all the trappings that investment bankers’ money can buy: the Hunters Hill house in Sydney, the Queensland cattle station, Melissa’s Porsche Boxster that previously appeared on Joe Hockey’s parliamentary register of interests, the nannies and the $2,000 Thermomix machine that sits in Hockey’s parliamentary office that chops, dices, steams and promises to make asparagus risotto in eighteen minutes. Opinion8red October 15, 2013 at 10:02 am Three cheers for reader AB, stabbing the silver stake right through the heart of the matter. Hockey is a banking and finance lawyer, who “kiboshed a ‘phenomenal job’ in New York as chief advisor to the CEO of one of the world’s biggest banks” to return home “for the ‘unfinished business’ of politics and to fulfil a lifelong destiny as ‘a warrior for the Australian people’” [*VOMIT*] – http://www.smh.com.au/news/executive-style/management/no-ordinary-bloke-joe-hockey/2009/04/01/1238261636475.html?page=fullpage#contentSwap2 Hockey’s a bankster. ‘Nuff said. flyingfoxMEMBER October 15, 2013 at 4:54 pm @Opinionbred I am surprised. I wasn’t aware of Joe’s background. Looking at him and listening to him I would not have guessed … MavMEMBER October 15, 2013 at 7:54 am He forgot to add the bit about “.. because we have kangaroos”. I would have been convinced then. boyracerMEMBER October 15, 2013 at 12:19 pm Oh come on Mav that’s ridiculous, this is Australia he’s talking about – kangaroos are implied. Jake Gittes October 15, 2013 at 7:58 am It’s great to see continuity here from Swan to Hockey on the difference that is Australia and it’s about time other countries emulated the Aussie miracle and they too would have a wonderful future. Cameron/Osborne are trying in the UK with higher house prices but they are not as clever as this Australian treasurer. DT October 15, 2013 at 7:59 am Joe’s only 6 weeks into the job and already he’s gone full retard. At least he’s guaranteed himself a spot on the highlights reel when the crash comes. flyingfoxMEMBER October 15, 2013 at 8:07 am Never go full retard …. PhilBest October 15, 2013 at 9:09 am “….At least he’s guaranteed himself a spot on the highlights reel when the crash comes…..” +100, I was going to say something like that but you said it first. greggsy October 15, 2013 at 9:15 am Joe has gone full retard on a few topics, but i don’t think this is a case of that. It is him showing his contempt for the Australian people, you can see in his face that he doesn’t believe a word of it himself. so smug, like a guilty person taking advantage of an obvious loophole Forrest GumpMEMBER October 15, 2013 at 8:04 am Unquestionably….The envelope that Liberals are pushing is….. Hockey is undoubtedly right. Aussies cannot allow ourselves to get into the same position that the US is in. We Must live within our means. Yes our houses ARE within our means of affordability and poses no threat to our economy. Undoubtedly. Unfortunately in my unbiased un-opinionated view, Hockey’s unqualified comments are unacceptable. The notion that our housing market is unabridged from un-affordability is unanimously unattested. ____ Summary: Hockey needs to take acting lessons and consider using a thesaurus. Did you see him breath a sigh of relief at the end of the interview? I don’t think the host bought anything Joe said MavMEMBER October 15, 2013 at 8:28 am The host should move back to Ausieland and attend a few BBQs.. tetama October 15, 2013 at 8:09 am I am horrified listening to him near the end of the interview. Hockey understands the land economics very well IMHO. I always used to wonder if the govt is ignorant or chooses to look the other way so as to preserve their position (based on what he says I infer it is option two). This is pure Machiavellian politics and very sad because there is little we can do to change it. He mentions the demand factor of immigration (he does not mention any other demand driver, just this one which as we know is huge) and also discusses supply (highly restricted). Although he would know it, but did not state it, he must understand land is highly inelastic and thus highly price sensitive. If he knows this then one can assume that others (Abbott, Stevens, Treasury) also know, and I suspect state govts and oppositions understand as well. This is very sad as I now realize nothing substantial will be done re supply and probably land tax. That being the case, as Philbest would state, we are set to become like the UK, no real price correction down because supply is deliberately restricted on an inelastic good, and with no land tax then no forced incentive to release it back into the market Given I gave them the benefit of the doubt in the past about being ignorant rather than manipulative, I think I understand our path very well. Unless we mobilise somehow then we are probably locked in to a higher land price future like the UK. I look at the good work of David Collyer and the staff at Prosper Australia group, and Leith and the great commentators on this website, and really wonder if anything can be achieved because the general public are not aware IMO based on those I speak to, and more worringly those who are long are quite happy about the situation. We are a decadent society. Ortega October 15, 2013 at 8:36 am Do you think rates can keep falling? Immigration levels can keep rising? Mining investment will take-off again? Do you honestly think they can pull every lever, in perfect synchronicity, to keep the whole sham artificially inflated, in perpetuity? I don’t think they’ll have the luck to pull this off month after month. flawse October 15, 2013 at 8:53 am Ortega Maybe! But it is all a consistent policy. They don’t pull levers. They just see that all we have to do is keep the foreign money flowing. That’s all it takes. Take a look at the politics and how Barnaby has been told to shut the hell up! Take a look at the time when Rudd ascended to the Prime Ministership after Howard. All he had to do was point to the reality of our foreign debt and asset sales to destroy the credibility of the Howard/Costello regime. He didn’t! Why not? Keating’s Prime Ministership was doomed as soon as he made the ‘Banana Republic’ remark. Why was this? Jason October 15, 2013 at 8:57 am It still stands to reason that an increasing prolonged unemployment rate could bring the whole thing down. But other than that, even in current conditions there is a little bit of headroom left for prices to grow (as evidenced by foreign investor interest in Sydney and Melbourne). The governments don’t have to pull any levers at all, really. They can leave the settings as they are and property will continue to be anaemic (rising with or just below CPI, low volumes, etc.), without outside influence. By ‘anaemic’ I mean compared to the last ten years, as most of us know that healthy property markets aren’t supposed to grow 7% year-on-year. It might disenfranchise young first home buyers, but they aren’t a powerful enough voter block to be worried about. Most of them have given up anyway, are renting (for much cheaper than buying) and travelling the world instead. tetama October 15, 2013 at 9:02 am Hi Ortega That is a good question and unfortunately I do not know the answer as otherwise I would have a position reflecting it ie long or short. But the truth is I do not know, I can see there are many demand drivers created via the govt and banking system and only one supply which the govts control. If I understood govt view of supply properly, and assuming the other demand drivers remain as is, then I think I have a reasonable idea of the outcome. A great quote I once read was “if I owned all the land, and you owned all the money, how much would I charge you for first nights rent”. The obvious answer is the landowner would take all the money for the first night rent, and then banish the renter and there family off the land ie out into the sea to their demise. I used to think 10 years ago that the situation was crazy then, and would correct as I was being optimistic. But given Hockeys comments I not so sure anymore. flawse October 15, 2013 at 9:06 am Screw you jack! As you said Jason FHB’s don’t have many numbers for voting! Also it will be the youth who will be unemployed. We boomers have the jobs and we’re keeping them. There used to be a time when the weather girl got too old and it was time to give some up and coming junior a go! Air hostesses were young fit and attractive. Older ones with ability moved on to higher jobs. Old ones without ability were moved on! If necessary we create more jobs for people sitting on their arses every day just so we can all stay employed. Another couple of rate decreases from the RBA and it will all be sweet! flawse October 15, 2013 at 9:10 am tetama…I’ve been waiting 40 years for the BIG correction. There have been a few hiccups along the way but no BIG change. The BIG correction requires someone to vow to ‘do the right thing’ so good people here I hope you are right but don’t hold your breath! It ain’t gunna happen. The answers lie back in time. P.S. Please be aware of the massive dislocation that any serious correction, and attempted return to a productive economy, will cause. It almost really can’t be allowed to happen until it does! Ralph October 15, 2013 at 9:16 am In the long run, you may be right, Ortega. Unfortunately, though, I think they can keep propping things up for several more years yet. The other factor is that Aussies are very compliant and do what they are told. People whinge a bit and then simply go down to the bank and get a mortgage because that’s what they are supposed to do. Cultural habits like that are very hard to break. The slow melt is the best that can be hoped for. Personally, I think the slow melt is still likely due to the very high personal debt levels. What I think we’re seeing now is a bit of an upward spurt within the context of a long-term (i.e. 10 years or so timeframe) slow melt pattern. Ortega October 15, 2013 at 9:40 am I know how to wait. And to hold the line. I remember warning people of a collapse prior to Sub Prime, Lehman etc. It was much harder to convince anyone back then. But the S did HTF. I was reading Mike Whitney, Dean Baker, Paul Roberts, Steve Keen, Michael Hudson, among others. And based on what I’m reading today, the signs are there. The bear capitulation will bolster the euphoria. It could be the penultimate sign. DT October 15, 2013 at 10:23 am The bears are definitely capitulating – not so much turning into bulls, but at least giving up on anything changing. Kliff_Fiscal October 15, 2013 at 8:10 am Nah, after hearing that I reckon ‘they’ have won. End game = finished and won for the next 10 years or so. Time to give up I reckon and move onto other things other than wishing for a fair housing market. reusachtigeMEMBER October 15, 2013 at 9:08 am Right on, seriously! The more of us that capitulate the better. No need to get on board, but after all these years of trying to give warnings it IS NOW time to let it all go, and even give it a nudge along! Pfh007MEMBER October 15, 2013 at 9:34 am Reusachtige, It looks like you will get your wish. There is every sign that Joe and Mr Abbott (ably assisted by the RBA) will drive the pedal to the metal when it comes to the residential property market. Vaaaaroooooom ! flawse October 15, 2013 at 9:49 am BOOM! Rocket fuel and navigation supplied by the RBA! Mining BoganMEMBER October 15, 2013 at 8:19 am Yay! He’s done it. That interview will be the turning point for property…and it will be played back forever. It’s a sign. Like the mighty eagle flying across the sun or the proud and noble beaver damming the mightiest river, this is the moment we felt the shiver through every Australian’s body. This is Joe’s moment… The day the constipated bear took a dump in the woods. reusachtigeMEMBER October 15, 2013 at 9:09 am There has been many signs. Business as usual. AB October 15, 2013 at 8:20 am Joe struggles a little with consistency. Apparently it’s bad to borrow money (that’s living beyond your means) but it’s good to sell off your country (it’s OK because we’ve always done it). It’s almost enough to make you wish for the return of the World’s Best Treasurer. http://www.smh.com.au/federal-politics/political-news/joe-hockey-hedges-bets-on-foreign-investment-limits-20131013-2vgt8.html “Mr Hockey said the lesson of the US situation was that nations must live within their means.” and “”I’m not going to pre-empt the outcome of any of the negotiations, but I do want to emphasise that Australia is open for investment and we need foreign investment. We need foreign investment because Australia cannot fund its own needs. It hasn’t been able to fund its own needs since 1788, and we have relied on foreign investment since that time to grow our nation. We are going to continue to rely on that investment, but obviously we need to deal with what is in the national interest.”” flawse October 15, 2013 at 8:58 am Absoloodle! “It hasn’t been able to fund its own needs since 1788” That alone should scare the living c..p out of anyone who reads or hears it. It doesn’t! Nobody gives a RA!….Well except a few poor souls crying in the wilderness of posting comments here! Opinion8red October 15, 2013 at 9:52 am This about sums up my present perspective … http://twitpic.com/depacj Jason October 15, 2013 at 9:01 am Apparently it’s bad to borrow money (that’s living beyond your means) but it’s good to sell off your country (it’s OK because we’ve always done it). I don’t know if he actually realises that those two are the same thing, or if the cognitive dissonance of Australian exceptionalism just overpowers common sense? AB October 15, 2013 at 9:28 am I reckon it’s cognitive dissonance. If he was aware of the contradiction then I think he would have be more subtle when talking about foreign investment. But who the hell knows? Either way, it’s an idiotic thing to say. squirell October 15, 2013 at 8:57 am come on – it IS different here. Aus has – massive immigration – loose foreign investment rules – a protected and mollycoddled banking system that wears NO RISK – a doveish central bank – neg gearing – no tax on family home – no means testing on family home – low taxes on asset investments – punitive taxes on savers and income earners – first home owners grants / state FHOGS / triple whammy FHOGs – restrictive land release policiies – millions of nimbys – SMSFs investing like crazy into property – the AOFM to buy junk housing bonds when banks cant – covered bonds … and whatever else is required in the future to keep the housing monster afloat. So ridiculous house prices ARE justified because we DONT have a housing market. we have a govt sponsored ponzi scheme. flawse October 15, 2013 at 9:39 am Squirrel…Great comment! tetama October 15, 2013 at 9:52 am Hi Squirrell That is a great list. If I could control only two things they would be land supply first and land tax second. As you know, if there are no restrictions on supply then the price for the raw land will be zero or close to it. If there is a supply limit, so that this capitalises into a land price, then use the “Henry George” model to land tax away the gains to the govt from the landholder. After all, it is the community that created the land value and not the landowner, thus land tax returns the gain to the community. This thus reduces the price of the land that landholders would be willing to pay for given that the govt takes the value away. No high land price, then credit offered in the banking system reduces in a major way given the land prices are so much lower. Reduced monopoly rent seeking The Claw October 15, 2013 at 9:04 am The world’s best housing minister might have just solved the problem Federal Member for Sydney, Tanya Plibersek, said City West Housing would receive over $9 million worth of incentives over 10 years to provide low-cost rental housing. “Thanks to the Rudd Labor Government, 88 new, more affordable homes will be built in North Eveleigh for people on low or moderate incomes,” said Ms Plibersek, who was responsible for developing NRAS as Labor’s Housing Minister following the 2007 election. “These much-needed accessible rental properties will be rented at 20 per cent below the market value rent, giving long-term housing security to low and middle-income tenants in our region. squirell October 15, 2013 at 9:07 am yep – give em a few crumbs to keep them happy. Arrow2MEMBER October 15, 2013 at 9:53 am Lols. 88 houses! Also, remember to keep reinforcing that the only people who worry about “housing affordability” are poor-ass losers who need public housing! Everyone else should just suck it up, grow some balls, and pay a million bucks for a cardboard box to sit in. Because then you’ll be rich! reusachtigeMEMBER October 15, 2013 at 9:10 am That’s a huge effort! Good to see they have been trying. The Claw October 15, 2013 at 9:22 am I am a bit worried by this part $9 million worth of incentives over 10 years If they spend $9 million right now they can buy maybe 9 Sydney houses, but if they wait the full 10 years, they might only be able to buy 4 or less houses with $9 million. Don’t delay, buy now! skippy October 15, 2013 at 9:04 am I don’t look at the House – I look at the securitization and if one looks at the discovery in the trusts per the PSA in some court cases… well… proximity counts. wayward… squared and cubed reminds me of an old military term… grid square eliminator~ PhilBest October 15, 2013 at 9:07 am I disagree with so much of what he says; right from the start: “it is inconceivable that the USA would default on its debt….” I think it is hard to imagine a future with no US default. flawse October 15, 2013 at 9:37 am Good point Phil. They will default it’s just a question of when and how. But it could be a long way away. As long as they don’t default our external account problems can be solved. Opinion8red October 15, 2013 at 9:56 am They ARE defaulting. It’s called deliberate currency devaluation. flawse October 15, 2013 at 10:37 am Yep agree Op8. It’s a process not an event. PhilBest October 15, 2013 at 9:18 am I find it absolutely incredible that he thinks there it acceptable to say that there is no bubble because every time prices ramp up, a few more marginal land banks become worth developing. Look at where decades of that kind of market, has got the UK economically and socio-economically. Sure, you might get permanently high urban land prices and smaller periodic downturns, but it is all bad in the long term for productivity, the tradables sector, home ownership, inequality, housing-related public health, and the share of national income enjoyed by “labour” and productive capital. I simply cannot understand the morality of leadership that sets a nation on this long-term policy course. Nudge October 15, 2013 at 10:22 am It’s not moral, it’s the deadly sins in action – decadence indeed! If you have morals, most likely you were promoted the virtues instead. Maybe we should have studied the deadly sins closely like our ‘leaders’ evidently have. The illusion of the land of the ‘fair go’ is like saying the meek will inherit the earth….. yep, when they’re buried in it! Who coined these phrases? Explorer October 15, 2013 at 9:19 am Hockey has no internally consistent economic philosophy at present. At least Abbott seems to be making a decent start at transitioning from opposition to government acknowledging that much of what they said in opposition was merely rhetoric to unseat Labor, giving his international apologies and jettisoning much of the more extreme language. A catalogue of Hockeyisms over the last two years should haunt him into government and he is showing less sign of a sensible transition. The Claw October 15, 2013 at 9:29 am Can someone put the last part of Hockey’s interview on youtube? I would like to see this open to comment from potential first home buyers. Pfh007MEMBER October 15, 2013 at 9:37 am Potential first home buyers should be watching it right here on MB! I will see if there are any around on twitter 🙂 https://twitter.com/pfh007 dumb_non_economist October 15, 2013 at 11:59 am This is a guy who is totally out of his depth! nexus789MEMBER October 15, 2013 at 1:22 pm He is way out of his depth. When he does not like something he gets verbally aggressive. Should be fun if we have a crisis. What does he think will have when an external economic shock hits Australia – the US defaulting for instance. Of course we are different here. Yorrick October 15, 2013 at 6:16 pm Rising house prices help make some of the more marginal new housing developments more affordable and realistic and deliverable.