From the usually smarter Adam Creighton today:
Strictly speaking, there’s no housing affordability crisis. If houses weren’t affordable people wouldn’t be buying them. But they are buying them, in droves. Over 50,000 home loans have been approved every month this year, above the average for the past decade.
Are homes too expensive? Too right! I’d like to pay less for a nice house in Sydney, which has been 40 per cent more expensive on average than even Melbourne, the “world’s most liveable city”, since the early 1980s.
Are we borrowing so much to buy property that we’re imperilling our economy? That’s harder still to answer.
Yet the ABC’s Four Corners program this week made it sound like a collapse was around the corner, jumping on the oldest bandwagon in public debate: the great Australian housing bubble.
Viewers expecting something balanced would have been left disappointed. Every pet shop galah has been talking about a housing crash for years. Every regulatory man and his dog have been warning buyers to be careful and issuing reports.
…They even wheeled out Gerard “it’s a powder keg” Minack, renowned “perma-bear” among local economists for his continual predictions of economic collapse. Seven years ago Mr Minack noted that Australian house prices were “expensive on every value metric … relative to history, and relative to houses in comparable countries”. They have almost doubled since then.
He told Alan Kohler on the ABC in 2009 that the benchmark US stock index was about to fall to 750. “I think people are far too optimistic. I’m not even sure they know how far they’re going to drop in the near term,” he said. The S&P500 never dropped below 900, and is now at 2444.
Actually, Adam, it dropped to 666 and Gerard Minack has been advising his global clientele of fundies on how to make hay ever since. But never let a a few facts get in the way of throwaway garbage.
I can’t be bothered dissecting more housing waffle. But good luck reconciling Creighton today with his other recent pieces on the bubble:
- I’d vote for Le Pen
- Immigration driving bubble
- Put family home in assets test
- Macroprudential a wet lettuce
All readers ask for is a bit of consistency and reason.
