Links 19 May 2017

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  1. The Irish authorities have not learnt a thing near 10 years on from 2007 housing crash … that put their Banks to the wall …

    … Are the Irish belatedly waking up ? …

    This country still needs to get its houses in order ten years after the financial crisis began … Lucinda Creighton … The Irish Sun

    https://www.thesun.ie/news/1006506/this-country-still-needs-to-get-its-houses-in-order-ten-years-after-the-financial-crisis-began/

    … extract …

    … However the clamour of young people who are desperate to buy – and I being one of them – is certainly being heeded by the Government. They have responded by implementing policies which are aimed at helping people circumvent the Central Bank’s restrictions.

    This is extremely irresponsible as it fails to address the real failures that exist in the property market and instead will have the effect of ensuring that young people once again get trapped in a borrowing cycle which will ultimately blow up in their faces.

    The problem in the market is not finance, it is cost. House prices are artificially high and the scale of borrowing required for a modest family home is completely out of kilter with the rest of Europe. … read more via hyperlink above …

    Lucinda Creighton – Wikipedia

    https://en.wikipedia.org/wiki/Lucinda_Creighton

    Lucinda Creighton (born 20 January 1980) is a former Irish politician and leader of the party she helped found, Renua Ireland. … read more via hyperlink above …

  2. 12+ years on since the release of the 1st Demographia Housing Survey early 2005, Kiwi politicians should know by now what ‘affordable’ is.

    What part of “3” don’t they understand ?

    Kiwibuild and the Crown Building Project – how will they affect you? | Stuff.co.nz

    http://i.stuff.co.nz/national/politics/92721466/kiwibuild-and-the-crown-building-project–how-will-they-affect-you

    … extract …

    … So how expensive is the country’s largest city, Auckland?

    Earlier this year it was named the fourth least affordable housing market among 92 major cities in nine countries.

    The figures from the latest Demographia survey revealed 10 times the median household income in Auckland is needed to buy a median-priced house, which cost $830,810. … read more via hyperlink above …

    2013 13th Annual Demographia International Housing Affordability Survey

    http://www.demographia.com/dhi.pdf

    DEFINITION OF AN AFFORDABLE HOUSING MARKET

    For metropolitan areas to rate as ‘affordable’ and ensure that housing bubbles are not triggered, housing prices should not exceed three times gross annual household earnings. To allow this to occur, new starter housing of an acceptable quality to the purchasers, with associated commercial and industrial development, must be allowed to be provided on the urban fringes at 2.5 times the gross annual median household income of that urban market (refer Demographia Survey Schedules for guidance).

    The critically important Development Ratios for this new fringe starter housing, should be 17 – 23% serviced lot / section cost – the balance the actual housing construction.

    Ideally through a normal building cycle, the Median Multiple should move from a Floor Multiple of 2.3, through a Swing Multiple of 2.5 to a Ceiling Multiple of 2.7 – to ensure maximum stability and optimal medium and long term performance of the residential construction sector.

    • Govt to build Auckland houses: What about Tauranga? – National – NZ Herald News

      http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11857768

      The Government’s announcement that it will build 34,000 homes in Auckland in the next decade has left local politicians wondering: “What about Tauranga?”

      Tauranga and the Western Bay is the ninth most unaffordable area in the world, according to an international affordability survey. The average house price is 9.7 times the average annual household income – only slightly behind Auckland at 10.0, and ahead of places like Los Angeles (9.2) and London (8.5).

      The Demographia International Housing Affordability Survey deems any ratio above 5.1 “severely unaffordable”. … read more via hyperlink above …

  3. AUS wages growing more slowly than the cost of living? Yeah Guardian, that is what your religion demands – mass immigration of people from the 3rd world who are willing to work for $10/hour.

    • haroldusMEMBER

      Sometimes this mediocre country disgusts me. Fourth?

      Australia already has the fourth highest ratio of household debt as a percentage of net disposable income in the world

      I thought we were winning. 🙁

      • haroldusMEMBER

        I think we know what Reus’ response to Prof Keen’s advice is…

        As for those struggling to get on the ladder in the meantime?

        “The only thing you can do in the middle is say I’m just not going to join in, and if it happens on a collective level …. it’s game over for the bubble because the bubble only works if more people keep taking out more leverage.”

    • SoMPLSBoyMEMBER

      Extra points to Keen for being able to speak a language that people understand.

      ““The housing bubble makes the politicians look good because A, people are feeling wealthier, and B … people are borrowing money to spend,” he said.

      “Then the government runs a balanced budget and looks like it really knows what it’s doing”

      “It hasn’t got a f***ing clue frankly, because what’s actually happening is the reason it’s making that money is credit is expanding,” he said.

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