Monday, June 05, 2017

Australia isn’t the only country caught in a housing bubble

The writer below cannot find a common factor in housing price rises worldwide.  I can.  In China it's internal migration from peasant farms to the cities but in all the other countries mentioned there have been big inflows of "refugees".  Refugees have to be accommodated and that puts pressure on the housing supply, driving up prices.

In a free market the housing supply would expand to meet the demand but we don't have anything like a free market.  There are many rigidities to overcome, principally land-use restrictions supported most notably by Greenies but also by farmers and Nimbys.  Slowing down the migrant intake is the only way to rein in the housing price rises

Sydney, Melbourne and Brisbane should get some temporary relief from the extraordinary boom in Chinese-financed apartment-block  building but that is coming to an end so is no long-term solution

It’s only natural for Australians to be obsessed with our own property market woes, but there is a whole world of bubbles out there waiting to be popped.

We chatter endlessly about prices in Sydney and Melbourne, which is unfair to the other capital cities. But it’s understandable, as 57 per cent of the nation lives in Victoria and New South Wales, according to Australia’s statistics bureau.

And we’re right to be concerned. Only this week, Citigroup chief economist Willem Buiter said Australia is in the midst of a “spectacular housing bubble”. He joined a great host of experts worried that our two main property markets have been running way too hot.

The numbers back him up. CoreLogic, one of our most widely cited property pricers, says Australian houses now cost 7.2 times the yearly income of a household, up from 4.2 times income 15 years ago.

Between the global financial crisis and February 2017, median dwelling prices almost doubled (+99.4 per cent) in Sydney, bringing them to $850,000, and in Melbourne (+85 per cent to $640,000), according to CoreLogic.

But we should not delude ourselves that a housing crisis is a uniquely Australian phenomenon. Cries of “Bubble!” are ringing out across the globe.

Sweden’s central bank boss Stefan Ingves this week issued a warning about sky-rocketing household debt and soaring property prices. Sound familiar?

In Switzerland, the cities of Zurich, Zug, Lucerne, Basel, Lausanne and Lugano face similar risks.

Then there’s Ottawa, Vancouver and Toronto in Canada – an economy comparable in size and composition to our own. As it has for Australia, the International Monetary Fund has told the Canadian government to intervene or risk an economic crash.

The International Monetary Fund (IMF) has issued similar warnings for Denmark, which is battling soaring prices in the capital of Copenhagen.

Most important of all is China. Prices rose 22.1 per cent in Beijing, 21.1 per cent in Shanghai and 13.5 per cent in Shenzen between March 2016 and March 2017, CNBC reported.

The warnings are familiar. “If young people lose hope, the economy will suffer, as housing is a necessity,” Renmin University president Wu Xiaoqiu said recently.

The difference is, if the Chinese economy crashes because of a housing market correction, it will echo throughout the world.

Hong Kong is fighting bubbles, too. Reports on its property market are full of “handsome gains” and an impending “burst“.

Closer to home is Auckland in New Zealand, where prices have also doubled since the GFC.

Despite Brexit, the mother country is hurting, too. There are periodic predictions that London will “finally burst” after years of rampant price growth.

So what’s going on? The consensus is that these bubbles have been created by a combination of ultra-low interest rates, easy lending, rapid population growth, and an openness to foreign investment.

Saul Eslake, a renowned Australian economist, told The New Daily there are “common factors” across these affected nations, including immigration. But he cautioned against shutting the borders.

“It’s wrong, it’s factually incorrect to deny that immigration has contributed to rising house prices. It has contributed to it. But I would argue that to respond to it by, as Tony Abbott among others has advocated, cutting immigration would be the wrong approach.”

Dr Ashton De Silva, a property market expert at RMIT University, also blamed demographic change across the globe.

However, Dr De Silva said each country’s unique factors should not be ignored. “The fact that it’s happening the world over is important to note because there are many countries going through a very similar cycle, such as China,” he said.

“However, whilst we can take this overarching view, we need to be mindful that there is a very important local story going on. And that story is not always consistent.”

If Australia wants to beat its bubble, perhaps it should look to Singapore. It was fighting rampant prices too until the government intervened and did two things: boosted supply by building a whole bunch of new apartment buildings, and dampened demand by hiking stamp duty and cracking down on foreign buyers.


Now its koalas that are "threatened" by climate change

This is all just imagination.  Not a single Koala has been inconvenienced by CO2 yet

Australia's koalas populations and their coastal gum tree habitats could be devastated by rising sea levels, which would trigger toxic die-back disease, a scientific conference has been told.

Koalas feed only on the leaves of gum trees, and spend most of their lives protected in their tall branches. The iconic marsupial is listed nationally as a vulnerable species, and its numbers are falling.

Dr Rebecca Montague-Drake, an ecologist with the Port Macquarie Council in New South Wales, has published modelling that shows 14 per cent of the area's koala habitats will experience saltwater inundation over the next 50 years, climbing to 22 per cent next century.

She said rising salinity from bigger tides and floods would increase toxins in gum trees and "reduce the koala's food availability".

    "Koalas walk a really tight tightrope between the leaf that they eat, the high levels of toxins that eucalypts leaves contain, and the amount of toxin they can extract from those leaves," she said.

"When we start playing with the salinity balance in the soil, that fine balance in the leaf, between the toxins and the nutrient, values get way out of kilter."

Data suggests fewer than 40,000 koalas survive in the wild.

Dr Montague-Drake expects further destruction of coastal gum trees along a 1,000-kilometre strip between Jervis Bay and Moreton Bay, which could eliminate a third of the region's koala habitats.

She also said her modelling reflected a best-case, not worst-case, sea-rise scenario.

"We are only using a conservative estimate, because we know the trees characterised in these areas, the swamp mahoganies the forest red gum, are a little bit more resilient to salinity than some other species of eucalypts," she said.
Rising seas not the only problem

The sea level warnings add to a growing list of existing habitat threats for koalas, like forestry and unlawful land clearing.


Pauline Hanson mimics London Police advice in anti-Islam tweet

PAULINE Hanson has co-opted London police advice to people caught up in terrorist incidents to push her message of banning Muslims from immigrating to Australia.

As the latest terrorist attack in London was still unfolding on Sunday morning (AEST), the One Nation leader tweeted: “Stop Islamic immigration before it is too late.”

Her message was accompanied by a graphic that mimicked a “Run Hide Tell” message the Metropolitan Police tweeted earlier to advise people what to do if they found themselves caught up in the attacks.

The police message urges people to run to a place of safety, hide and turn their phones to silent, and tell the police by calling emergency services when safe to do so.

Senator Hanson’s version says: “Australia is tired of Labor, the Greens and the Liberals RUNNING their campaign that Islam is good for Australia.”

Senator Hanson has spent the past week in a dispute with Australia’s spy chief over whether there are links between Middle Eastern refugees and terrorism.

ASIO boss Duncan Lewis told Senator Hanson during a parliamentary hearing he had “absolutely no evidence to suggest there is a connection between refugees and terrorism”.

He later said the refugee program was not the source of terrorism in Australia, rather attacks were inspired by an extremist, radicalising strain of Islam. Senator Hanson campaigned last year in a Muslim immigration ban and no new mosques.

Opposition leader Bill Shorten said commentary like Senator Hanson’s played into terrorists’ hands by dividing the community.

“I just say to Pauline and everyone else - hold your horses.You’re in politics. Whatever point you want to make, make you may get an opportunity, but today it’s crass, idiotic and disgusting,” he said.


A simple request but Australia Post keeps getting it wrong

The speed of deliveries has slowed way down too.  In many cases a letter can take two weeks to be delivered

IMAGINE paying for a service, not getting it and having no recourse. Welcome to my world and one of my current pathetic problems.

I used to like Australia Post. I used to trust Australia Post. I like my postie and I like the folk at the Norwood Post Office – but Australia Post is just not delivering or, in my case, is wrongly delivering.

When I’m lucky enough to travel I always have my mail held. In December 2015, I filled in the “Hold mail” form.

I always arrange to have this done in advance to check that it is place. It wasn’t.

Mail was delivered instead of being held. I spent a tense afternoon ringing Australia Post operatives on 13 numbers at my expense, being kept on hold and being constantly told how important my call is to Australia Post.

I eventually learned that the paperwork to hold my mail had not gone from the Norwood Post Office to the Kent Town Mail Delivery Centre.

Even though I cited customer reference and receipt numbers, I had to photograph my copy of the form and receipt and send it to someone somewhere nowhere near me.

Eventually, my case was subject to inquiry and I was eventually told my “Hold mail” fee would be refunded in six weeks.
A postie delivering mail.

Then it happened again. Despite a “Hold mail” in place while I was in China to watch the wonderful Power, mail was delivered. I paid $32.70 for a service which I didn’t get.

Same palaver. Long waits on the phone. Cue inquiry. Cue apology. Cue “We don’t know how this could have happened”.

Then: “Don’t worry, we have a new computerised system which guarantees this will never happen again.”

Oh, yeah? To screw something up you need only one human, to really screw something up you really need a computer.

Australia Post has now twice violated a contract with me. A mail delivery service did not deliver what it was contracted not to do by delivering mail.

I’m really peed off so I rang a lawyer and said: “This is your chance to be Erin Brockovich.” There is a vast amount of tiny print on the back of the form and, if you can find a magnifying glass, you will learn that, in legalese, under Limitations, Liability, Release and Indemnity that Australia Post is not responsible to deliver or not deliver mail or anything at all under the Australia Post Corporations Act of 1989.

It promises not to promise to deliver or not deliver the mail. This would be funny on Yes, Minister but it’s annoying. The form also says I’ve also signed to “release Australia Post against any loss or damages whatsoever”.
Ahmed Fahour and postie Ron Trevillian with a new delivery vehicle, in Sydney. Picture: David Smith

How is this fair? Do what you like and face no consequences? Imagine buying a washing machine and then being told that not only are you not getting what you paid for, you may or may not get a refund and have no legal recourse.

Meanwhile, former Australia Post tsar Ahmed Fahour was not denied a $4.8 million yearly salary package.

So, I decided to show the terms and conditions to a barrister who said Australia Post would be laughed out of the High Court – but you need fortitude and very deep pockets to get there.

We are being screwed daily by corporations which rely on us not wanting to wait on the phone while being told our call is important, knowing that we’ll fold and go away, lick our wounds, do nothing and let them get away with violating the once-sacred rights of the customer.

We rail against people not taking responsibility for their actions but allow the corporate world to evade responsibility and ride roughshod over our rights.

Service should be a responsibility. An honour. A contract. A duty. We are all made lesser by the lack of service and responsibility.

As the great Anton Chekhov wrote: “Any fool can survive a crisis, it’s the day-to-day living that wears you out.” Australia Post-modern is a mess. Lick it and see.


Posted by John J. Ray (M.A.; Ph.D.).    For a daily critique of Leftist activities,  see DISSECTING LEFTISM.  To keep up with attacks on free speech see Tongue Tied. Also, don't forget your daily roundup  of pro-environment but anti-Greenie  news and commentary at GREENIE WATCH .  Email me  here

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