Housing speculation culture studies: 'The Castle'

The boffins from the Brown Couch's Institute of Tenancy Culture Studies are still hard at work on the TU's submission on the draft Bill, so regret that their next eagerly-awaited study of tenancy culture has been delayed.

Instead, the Institute is very proud to host a very special guest lecturer, Prof Ross Garnaut, who will present some of his recent work in the allied field of housing speculation culture studies. Ladies and gentlemen, Prof Ross Garnaut.

(Prof Ross Garnaut)

And the subject of Prof Garnaut's study is: The Castle.

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In 1997 a low-budget Australian movie dominated the national box office. The Castle cost $500 000 and took nineteen days to shoot. The movie's title was drawn from the platitude 'Each man's home is his castle'. Its major theme was an examination of the rights and value pertaining to home ownership.

(The Castle)

The lead character, Darryl Kerrigan, was an iconic figure of Australiana: working class, egalitarian, down-to-earth, someone who might have been described as 'a good bloke'. He was played by the lanky, laconic Michael Caton, whose moustachioed credulity encapsulated Australia's most adored self-image. The film held an ironic mirror up to Australia. On display were those dimensions of the nation that did not fit with with its self-image of giving everyone a 'fair go'.

The Castle's launch coincided with changes that curtailed the realisation of traditional, passionately held goals of home ownership. That great Australian (or American or British) dream was mutating into volatile and dynamic asset trading. There is no better symbol for this shift than the subsequent career of Michael Caton. After the success of The Castle, he was recruited to host a major television series called Hot Property. In a case of life ignoring art, the man behind Darryl Kerrigan, the embodiment of passionate owner-occupation, became the face of asset speculation. The program offered tips on how to buy, renovate and sell property. This theme grew so strong with passing seasons that in 2000 it was renamed Hot Auctions. This was the very opposite of the quaint owner-occupied culture venerated in The Castle.

What drove this transformation?

Anglosphere house prices had boomed before. They had surged in the late 1980s as corporate freewheeling stoked growth within economies that had experienced recent financial liberalisation. However, the rise in prices was soon brought to heal by high interest rates and then the early 1990s recession.

But the boom that emerged in the mid 1990s went much further. It was described by The Economist in 2005 as 'the greatest bubble in history'. The Economist estimated that from 2000 to 2005, global housing more than doubled in value to more than $70 trillion. From 1995 to the various peaks in 2006-07, median house prices grew by a total of 139 per cent in the United States, 261 per cent in the United Kingdom and 169 per cent in Australia.

The housing market was supercharged by a swing in perception away from home ownership for a roof over one's head, and towards home ownership as investment. The swing towards housing speculation was given a special boost when the US, UK and Australian governments altered capital gains tax laws within two years of one another. The changes made it much more advantageous to receive income from capital gains than from the sale of the services of one's brain or hands.

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Thank you, Prof Garnaut. For further reading, see Ross Garnaut's very accessible and almost instant analysis of the global financial crisis and beyond, The Great Crash of 2008.

(from Melbourne University Press)