Morrison out of ideas to save property prices


Good news here, via the AFR:

The federal government is planning a series of housing initiatives for the October 6 federal budget, but has rejected growing calls to fund large-scale social housing projects, saying that was more of a state responsibility.

Housing Minister Michael Sukkar told a closed conference last week that housing would be a significant element of the federal budget, which would focus on stimulating jobs and economic activity.

…While no budget decisions have been made on housing yet, the government is considering extending the First Home Loan Deposit Scheme it took to the last election, as well as tweaking an existing finance scheme for social and affordable housing to free up monies trapped within.

If burning naive FHBs at the stake is the best that they can do then sell, sell, sell because the fiscal cupboard is bare for house prices, right along with the cobweb-filled monetary drawer.

We remain bearish house prices owing to:

  • high unemployment;
  • immigration collapse;
  • bank tightening;
  • crashing rents;
  • virus convulsions;
  • 1.3m loss-making landlords getting smashed on income and equity, and
  • monetary plus fiscal exhaustion.

It’s investors that drove prices up and it’s investors that will drag prices down.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.