The Pencil Guy: Hourann's illogical blog

Another rant about housing affordability

Tuesday 13 February 2007 at 9:53 pm

This blog is now working again (or so I hope? I broke a bunch of links yesterday), my e-mail is back in action, and after a somewhat annoying DSPAM setup I have a shiny new anti-spam solution (I might even have to document what I did sometime). So I shall now return you to your regularly scheduled programming: random rants on the state of the State, with a bit of geeky tomfoolery and international politics thrown in for good measure.

There’s been some buzz, for some time, about property prices in Perth and their perceived effects on people who can’t afford a house (naturally, the loudest claims are coming from these guys, and they’re still beating their “taxes must be cut!” drum). Although I wonder about the limited evidence that this is an actual, real, screwing-with-social-welfare problem, it’s definitely an issue with votes in it. So yesterday Mr. Carpenter announced that he’d pitch in up to 40% of the cost of a house less than $365k, for families earning less than $60k per annum.

It’s a clever solution, and in the long term, there could even be profit! It’s also not a new idea, with similar schemes active in Scotland and other parts of the UK, though I’ve found little about whether these have worked.

I see only one flaw: $300 million is an awful lot of money to spend to help just three thousand families, even if it will be returned eventually. There are a lot of things that can be done for less that’d be of benefit to many, many more people. That said, the existing Keystart home loan scheme has also been rather pricey over the years … so maybe that’s just the cost of this kind of welfare.

Finally, and unrelatedly, an international smattering: despite some (predictable) opposition, abortion law in Portugal looks likely to change. I’m intrigued by the way that whaling is in the news again. And while it’s great to hear that there’s a new deal to relieve tensions surrounding North Korea, I wonder how long it’ll be before one of the involved parties breaks their commitment? (As pessimistic as that sounds, it’s been the pattern for years now — and there’s plenty of blame to go around.)


A rant: housing, the market, and sustainability

Saturday 5 August 2006 at 7:48 pm

It is generally well known that although the Liberal Party extolls the virtues of free markets whenever they can, they only really believe in them when it won’t hurt at the ballot box.

For proof, consider the current reactions by our State opposition to Perth’s housing market, interest rates, stamp duty, and land availability. Much like petrol prices at the Federal level, there’s all sorts of talk about how government should Do Something ™ because, oh dear, the poor defenceless first homebuyers can’t afford the McMansions that have become so popular as of late. Never mind this one example of the free market moving in a good direction for the environment; our opposition friends have remembered the need to appease the election-deciding mortgage-belt folks.

So they want to interfere in the housing market … to “improve affordability”.

Thing is, the “great Aussie dream” of a huge quarter-acre block with a four bedroom house (or, lately, a six bedroom, home theatre with added games room and alfresco area, open-plan house) is ridiculously unsustainable. You cannot build an entire city out of houses like that — and economic forces are (slowly) starting to reflect this.

If people are priced out of buying massive homes that were probably beyond their means anyway, then that’s a good thing. If attitudes shift so that Australians no longer expect to always live in a huge house, that’s even better.

I don’t mean to go completely laissez-faire — there are plenty of cases of market failure, and government should intervene in those cases. But this, IMHO, is not one of them.