The Best Book on Aussie Housing I've Read in Years
If you ask an Australian politician what the solution to Australia’s housings problems are, you’ll hear the same thing every time: “supply, supply, supply” – or something like that.
If you want an actual explanation of all the factors impacting the market, and how it plays out in multiple way, pick up a great new book called “Our Place” by Matt-Lloyd Cape, a researcher and social policy expert.
Here’s the cover…
I was unaware of Matt before reading this.
I’ve spent over a decade researching real estate, and I’m impressed how deep his reading and references clearly go.
This is not a book that will tell you when the current correction ends.
But it does help explain, among other things, why older Australians are much more financially secure than younger, the falling national birthrate and why One Nation is rising in the polls.
He also points out – in rebuttal of the typical political solution – that Australia builds a huge amount of houses.
The supply argument is…well…garbage!
If supply really was “the issue”, we’d have solved it long ago
Matt calls the whole sorry, messy situation ‘the Oct0pus’, because issues around housing slithers into so many different areas. I couldn’t agree more.
You’ll also see the global economy is structured the same way as it was before the GFC – quite pertinent as we go into the dangerous phases of the 18 year cycle.
There’s a depressing thread that runs through it all.
Australia’s destiny, on current trends, is for higher levels of poverty, crime and homelessness. It can’t be any other way if the housing market remains financialised as it is now.
Australia’s economy will become like the ‘K’ in America, where only a high income or rich parents will get someone into a property securely.
The next level will be people saddled with huge mortgages for life that are neither homeliness but can’t really flourish either. Their income becomes devoted to servicing the debt.
It’s a treadmill to nowhere. Then there will be the permanent underclass already forming now.
Oh, and Australia’s superannuation system? The whole premise is built on making people independent of the age pension.
That’s not going to keep working because more and more people will use it to pay off the mortgages they take into their old age.
Back toward the pension they go!
This might be bearable if it was all “economics” and you and I can overcome it and hit the “good life”.
Unfortunately, as the global trends highlight, people are more likely to swing toward the extreme the further they fall behind.
It’s not all bad!
That all sounds a bit grim. Matt isn’t just a griper. He paints potential solutions, based off Australian history.
One solution Matt would like to see is high speed rail. This is in order to empower some of Australia’s regional cities to take the pressure off the big capitals. He calls them ‘Boosted Cities’. It’s a neat idea once he extrapolates the whole thing.
The government could also capture the uplift in land values to help pay for it. It would also reduce Australia’s use of diesel and jet fuel – now a strategic vulnerability badly exposed.
There are plenty more ideas from Matt how Australia could restructure the economy and social system to create a fairer and more resilient society.
I urge you to read it for what’s possible.
That said, we have to deal with the reality in front of us.
The government’s recent tax changes are already creating a firestorm, the market is falling and any more big changes look politically unlikely.
That means the Australian economy remains hostage to the global forces building now.
The Octopus lives on.
Don’t forget it when the financial indicators start to show signs of distress.
Best wishes,
Callum Newman
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