First, Damon Young takes apart the cliche of the 'dream' of homeownership, observing that the high cost of owning is an oppressive nightmare for many. Life-long renter Sigmund Freud, who knew a bit about dreams, preferred to spend his money on things that made his home-life beautiful, rather than interest payments.
(Sigmund Freud, tenant)
The bubble is there, but it has been with us for nine years. The higher cash grants have merely sustained an already inflated market. As reassuring as it is to see these misgivings emerge among banks, it seems to be a case of too little, too late.The concerns of Mr Stevens about land values are well-founded, but supply factors do not come close to accounting for the near trebling of house prices in the earlier phase of the boom (when the word bubble was rarely heard).
The bubble may eventually burst or slowly deflate, but the lasting improvement in supply and affordability Stevens wants to see will never eventuate as long as government policy encourages speculative investment in established homes.
In his recent 6000-word essay, Kevin Rudd promised a tax system "that encourages productive investment". His Government could begin by reconsidering the largesse that successive administrations have heaped on the housing market in the form of grants, negative gearing and capital gains tax concessions.
The least it could do is ensure that the bulk of these benefits are directed toward those who would build new dwellings rather than those who gamble on the price of existing properties.
Well said, Mr Fante!
Would Freud have dreamed quite as sweetly if he lived under the NSW Residential Tenancies Act? Or would he have picked up a nasty neurosis, what with the constant fear that he might, at 60 days notice, for no reason whatsoever other than a landlord's whim, be forced willy-nilly to abandon his cosy reflections, foresake his patients, forgo his income and his weekends on increasingly desperate apartment-hunting. Would Freud have had a nervous breakdown at the thought of packing all his fragile treasures into the back of a bumpy truck, only to face the prospect of having to move again within a year or two? I hope Dr Damon Young, in between reclaiming his housing fantasies, took the time to make a submission on the importance of genuine security of tenure to the Office of Fair Trading's Review of the Act.
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