With climate change forging into our conscience day by day, how are Gen X,Y & Z to feel when they realise they have been ripped off like no other generation before? The increase in the First Home Owners Grant saw nearly 13,000 youngsters manipulated into buying at the top end of the property cycle in January alone.
Tell your friends – whatever you do, DON’T BUY NOW! This is an 18 year property cycle and will pop soon.
The financial illiteracy of the general populace is further enhancing the wealth gap. Will economic know-how be seen as crucial once the dust settles on the ugly months we have coming our way? The wisened property speculators have left the market spectacularly, cashing out just as their advisers directed. What a pity youngsters have Paris Hilton to advise them….
The lobbying forces for an extension of the FHOG are in full effect (it is due to expire June 30). It is widely understood amongst policy wonks that this is being used as a pump priming stimulus package to buffer the construction industry, rather than to provide affordable housing.
However, the reality of day to day life sees many youngsters miss the nuances in the debate. Mainstream media does little to bring balance to this looming tragedy. With the property lobby the major benefactors to political companies/ parties, it seems likely that the dominance of lobbyocracy will again prevail in this world of poll driven, spineless politicians. Ruddy pawns.
And to think that Brumby-otis has hit again with Minister Madden ripping planning controls for major developments from the closest thing we have to grass roots politics – local councils. This will see large tracts of public land sold to VicUrban or major political donors who have played the game of land hoarding until their planning desires are finally approved.
The casualisation of the younger workforce exposes a massive risk. Banks are like sitting ducks for our sub-prime like FHOG recipients. Will they get bailed out when the effects of the job layoffs start to cascade into foreclosures? Michael West reports:
Outside the first-home buyers, interest rate cuts have done little to spur growth. Since August, the number of loans to existing owner-occupiers has risen only 1.2 per cent, compared with the 65.4 per cent surge in first-home buyer loans.
In a dramatic reversal of the trend towards increasing ownership of homes by negatively geared investors, the financial crisis has seen first-home buyers lift their share of lending from 17 per cent to 29 per cent in just six months.
At the same time, the share of lending for home purchase going to investors has shrunk from 40 per cent to 30 per cent, as the banks become more wary of lending, and investors more wary of borrowing.
The Bureau of Statistics reports that lending to would-be housing investors so far this year is down roughly a third from a year earlier, plunging from $12 billion to about $8 billion.
The net result is that while lending to first-home buyers has risen 84 per cent since the Government lifted the first home buyers grant, the total amount lent for housing has risen far more modestly, by 11 per cent.
Warn your friends – don’t buy now! Wait a year. You’ve heard that before we know but this is an 18 year cycle, a generational cycle that goes back 400 years. Read Boom Bust 2010 or listen to a recent interview with the author Fred Harrison. Time for some laughing yoga to get through this…..