WHO CAN YOU TRUST?
~~~~~~~~~~~~~~~~~~

John Howard's little battlers get hit
hard by Howard's Housing Horror as they
try to climb the greasy pole of futility.
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When Australia won "The Award for the Nation with
the Least Affordable Housing", it got confirmation
that the nation is facing an unprecedented housing
affordability crisis.
First home buyers have seen the dream of home
ownership locked away from them forever.

Demographia (www.demographia.com) released the
results of its "International Housing
Affordability Survey" in January 2007, warning
that the slump in home affordability will slash
household spending, retard economic growth, and
push up unemployment.

The United States, which scored 14 out of 25 of
the world's least affordable markets (No.1 L.A.,
No.2 San Diego, No.3 Honolulu, No.4 San
Francisco....etc) still came in overall much more
affordable than Australia relative to income.
While Canadian housing was ranked half as
expensive as Australia overall.

Not surprisingly, the finger-pointing has begun.
Politicians and economists are pointing the finger
at "rapacious" local governments blaming
restrictive land development policies, excessive
local taxes and exorbitant infrastructure costs.

Local governments deny these charges. They quote
the then Governor of the Reserve Bank of Australia
(Ian Macfarlane) who told a House of
Representatives Committee last August that while
infrastructure costs had indeed added to the cost
of new housing, the main reason house prices were
so high was low interest rates. Encouraged by
"mainly tax incentives, plus a history of
inflation....(buyers) borrowed the money and drove
up house prices, so the whole stock of ... houses
basically doubled in price."

Local government planners blame low interest rates
for creating the huge surge in demand that
artificially inflated the house prices as buyers
fought each other in a mad scramble to buy as many
properties as they possibly could with their
borrowed money.

It is frightening to learn that every major
recession in Australia was preceded by such a
property "boom" as Australia now "enjoys".

So who's to blame? The people who supplied the
punch bowl?...or the party morons who didn't know
when enough is enough? Maybe the answer is they're
both to blame, but I'd suggest the federal
authorities are most to blame. They're supposed to
know better and are in positions of the highest
responsibility.

As I asked: Who can you trust?

.oOo.