good analysis by someone who knows, page-2

"What is it about housing that stimulates so much uninformed debate? Most articles produced by notionally reputable authorities are factually incorrect."

How ironic coming from you Mr Joye.

"debt servicing is incredibly poor (despite Australias high mortgage rates, it is actually exceptionally good by global standards based on our very low default rates);"

True, but defaults are rising fairly substantially. We will never see the levels of the US because we can't just hand back the keys. However, we can sell up.

"affordability is at all time lows (it is, in fact, around where it has been on average over the last 20-30 years using a range of different measures);"

So why do the RBA bang on about it so much then?

"prices are seven or eight times incomes (average home prices are actually 4.6 times average disposable household incomes using the largest sales database in Australia and the ABSs December 2009 National Accounts data);"

Unfortunately it now takes TWO wages to make up that disposable income you talk about.

" prices have skyrocketed over the last five years (growth in national home values has, in fact, been almost exactly on par with per capita incomes and significantly less than system-wide income);"

Unfortunately, we are comparing an equal percentage increase in a small number versus a large number. That's why they diverge greatly over time.

" and prices are purely determined by demand-side factors, such as credit growth and interest rates (a mistake made by some high-profile economists during the GFC, who now presumably recognise that the supply-side has a role to play)."

When credit is easy to get demand will increase. When credit dries up, demand dries up.


I can't be bothered continuing with the rest, it's all the same as his previous articles.