r0dman.com

It must be nice to pick up a copy of the local paper, read it, and believe 100% of what is written. Maybe I’m just too cynical.

I read an article today about the Victorian state government buying 10,000 hectares of grassland, with an additional 50,000 hectares being considered. The land is being purchased “to compensate for rare grasslands lost with the expansion of Melbourne’s urban boundary”.

So land that the government sold off years ago for a song, now is being purchased back by the government at top dollar no doubt. When everyone is told that there is a “shortage of land”, clearly having the government buy it from the developers is just going to create a greater shortage, right? Either that or the government are trying to encourage a shortage – dare I say, to prop up the housing prices?

If your intentions are just to keep house prices high, it makes sense I suppose. Encourage population growth, limit new land developments, and force people to cram into the cities – it will force land prices to stay high.

Our good friend Obama plans similar things. Fifty cities like Detroit, Philadelphia and Baltimore, once industrial boom towns, are now abandoned by business with no future employment in sight, and as a result most residents have followed suit. The neighborhoods are now filled with abandoned homes, and some low income families.

Decaying houses are bulldozed, and with the removal of existing residents, entire neighborhoods will be levelled, returning the land to nature. There’s not much information on how the displaced families are compensated for losing their house in this process!

I just can’t see information like this without ulterior motives staring me right in the face. The way I see it:

• Either there is a huge surplus in land (which it’s alleged that there isn’t) so it is ok to reclaim the land for nature, or
• Property values are far too high, and a shortage needs to be created to prop up these values.

I’m all for “greening the earth”, just not when it is an underhanded attempt to keep a bubble inflated.

Every Australian knows what a first-home buyer is entitled to by now. A heap of free money! But is there really such a thing as free money?

According to a recent report by market research firm Brandmanagement, young home buyers’ loans have jumped an unsustainable $52,000 (23%!) in the past two years.

From February 2008 to February 2009, first-home buyers have flooded the market, up 9.6% now comprising 26.9% of the market. It’s almost as though there’s something they don’t know!

Here we essentially have a boom within a boom. The increased madness of first-home buyers rushing to get into the property market before they lose their “free money” or “before the next boom” has pushed prices up, despite times of economic doom and gloom. This “mini-boom” in itself gives first-home buyers more reason to commit earlier than they should. In the belief that property will only increase in value, they want to enter the market as early as they can at any cost.

Andrew Inwood, from Brandmanagement is quoted saying:

“What the government incentives appear to have done is transfer the money from the people who are borrowing money to buy their first homes into the pockets of those who are selling at a more attractive price.”

The issue for me is the short sightedness of this whole situation. Anyone who has taken the time to do the research knows that Australia is not in a sustainable economic situation right now, and propping up the bubble with grants like these is just prolonging the inevitable. Why give people a false sense of security and then screw them over?

It’s hard to make a comparison, and this example is probably a little extreme, but during a war what would you prefer? To have your country bombed and suffer considerable damage in an instant, and then have the attacking country leave? Or to have troops attacking nearby, tormenting the families and fighting for five or ten years? The way I see it, instant annihilation, while hard for everyone, allows the country to be rebuilt immediately. People will realise what is actually important in life, and pull together to reconstruct their homes, hospitals, and so on.

It’s amazing how this whole situation is only centered around money, not life or death, and yet people still want to believe that everything is peachy, while all they are really believing in is a slow and painful death of the market.