Home safe?

Home prices in Sydney are out of control. They compare unfavourably with almost every major city in the world.

Graph from this paper

Why? Well, that depends on your vested interest. Some people blame the State Government, for not releasing enough land to developers.

Others blame the State Government for not doing enough to force councils to rezone land to encourage higher density developments.

It's also easy to blame the Federal Government for excessive immigration. Or the Baby Bonus, which was created, at least in part, to encourage procreation.

Maybe it's just the inevitable consequence of living in a city that is widely regarded (by most) as being a thoroughly excellent city to live in.

It's probably all of those reasons. Of course, it doesn't really matter why it is so expensive - it just is, and the government needs to deal with that reality.

In recent years, a number of steps have been taken. New land is continually being released to developers - although eventually that land starts to become so remote from the rest of Sydney that the process becomes a farce.

Continuing to release land in the Campbelltown area (for example) is certainly necessary. But it can only be part of the solution - it is incredibly time consuming for those residents to commute to the Sydney CBD (or, for that matter, any of the "cities" that make up the Greater Sydney, except for Campbelltown itself).

From the NSW Planning and Infrastructure website

The Labor government also introduced a numbers of measures (continued by the O'Farrell Liberal government) requiring local councils to plan for an increase in the population density of the area.

In my local area (the North Shore) this has caused significant protest as the feel of quiet suburban streets has been wrecked by the construction of large apartment blocks. No doubt there have been similar experiences across Sydney.

But, at the end of the day, house prices have continued to rise.

Graph from here

This is why we have the first home buyers grant. It was introduced as a measure to assist First Home Buyers in getting a foothold in the market.

This makes intuitive sense. If house prices are out of reach, then why not give those trying to buy into the market a helping hand? If you've just sold a home, then odds are you have a benefited from the inexorable rise in prices - but a first home buyer does not have that advantage.

The grant was initially $7000. And, in the spirit of full disclosure, I gratefully accepted that sum when the wife and I bought our first home a few years ago.

The problem is that the research suggests that these steps did nothing to make homes more affordable for first home buyers (see for example this, or this)

Those who are purchasing their first home have particular preferences that differ from (say) families with kids, or retirees.

This meant that, where a vendor had a home that was attractive to a first home buyer, there would be a multitude of buyers who all had the backing of the grant.

As a result, in general, the price of the home was increased by more or less the value of the grant as bidders pushed up the price. The only people that benefited were the people who had bought in before the introduction of the grant.

Moreover, in light of what happened in the global economy in the last 5 years, there should be a level of concern about throwing money at first home buyers to assist them to buy into the market. The money would, in most cases, be used to assist the purchaser to get a deposit together.

There are good reasons why banks require a deposit. One of those is to show the bank that the borrower has the capacity to cobble together cash over a period of time, meaning that the borrower is more likely to be able to effectively budget well enough to repay a home loan.

Last year the rules were changed. When the state budget was released last year it was announced that, from 1 October 2012, the grant would increase to $15 000, but would apply only to new homes.

This made the grant far less about new home buyers and far more about propping up the building industry. Which is fair enough.

Given that the announcement was made in June 2012, it should hardly be surprising that there was a great deal of marketing along the lines of:

How much that helped is anyone's guess. Naturally enough, there are a multitude of factors that affect the quantity of homes financed. But this graph has been splashed around a fair bit today:

Graph from here

Now, there an immediately obvious reason for the fall - if you knew that the you had to get in before October to get that grant from the government, isn't it a no-brainer to change your plans to ensure your purchase qualifies?

The natural consequence is depressed figures for the quarter following the removal of the payment.

How much of the fall can be blamed on the amendment of the grant? It is impossible to tell. It would be helpful if the (otherwise outstanding) ABS provided further breakdown of the first home buyer purchases into new and existing properties, but I don't think it does.

In all those circumstances, this story that appeared on the SMH website today jarred with me.

Full story here

Further down:

Burney's comments are ridiculous, and deliberately mislead the reader. The reason for the fall is (at least in part) what I have outlined above - people getting in before the changes late last year.

The total number of new dwellings purchased has fallen in the last quarter.:

Total number of new dwelling purchases in nsw (source)

Whilst the number of established dwellings purchased has risen slightly:

Total number of established dwellings purchased (source)

Has the O'Farrell government "abandoned first home buyers"? Of course not.

If these first home buyers want to buy a new dwelling, the payment has doubled. Of course, the cost of those dwellings will no doubt be significantly higher than it would be without throwing money at first home buyers, but that is a different discussion.

As for those first home buyers who do want to buy an established dwelling - the cost of that dwelling will be significantly less given that most of the potential buyers will no longer have an extra $7 000 from the government backing them up.

The government has stopped pretending that the new home buyers grant would make housing more affordable for first home buyers, and is rather focussing on propping up the building industry.

Whether they should be doing so is another issue. But have they "abandoned first home buyers"? Hardly.

A Burney Misogeny?

Is Barry O'Farrell a misogynist?

I don't know. But I certainly was surprised to see this article flick through my timeline this morning:

Full story in the Tele

The comments complained of are further down the page:

Further down:

There were also complaints that O'Farrell had made derogatory comments about Kristina Keneally:

Whilst I don't for a second doubt that O'Farrell fully intended the alleged subtext, I don't have any intention of discussing whether they are in fact misogynistic.

No doubt others will have their say on that issue. But I can live without being flamed for "not doing feminism right". So I'll leave that for other blogs.

What I am interested in is whether this mud is going to stick.

There can be no doubt that the attacks that have been made on Tony Abbott for comments he has made about women have been incredibly effective.

Before the last federal election, GetUp launched this ad:

Whether it actually changed any votes is anyone's guess. It certainly wasn't the first attempt to label Abbott as a misogynist.

It wasn't really until Julia Gillard's speech in parliament late last year that the idea really gained traction in the popular media:

Whether you think her attack is fair or not, you cannot deny that it has fundamentally changed the public's perception of Abbott. It was a decisive speech that has (probably permanently) labelled Abbott as, at the very least, anti-women.

No doubt this is the kind of result that Burney would have been hoping for with the Telegraph article. No one else has picked the story up (as of late this afternoon, and as best I can tell) - but Burney may well have been hoping that bored NSW Political reporters might be keen to run with the issue.

If that is what she is hoping for, I think she is going to be disappointed.

There are many reasons that Gillard's speech resonated with the Australian public.

In part, it was a powerful woman sticking it to a powerful man in a way that we are unaccustomed to seeing, even today.

Moreover, it didn't overreach. She didn't need to look for offence, or trawl for comments and somehow twist them to suit her partisan goals.  Abbott's statements spoke for themselves.

Most of all, in my opinion, the reason her speech resonated was because it fitted generally with the latent opinion about Abbott.

Recently I read a comment the basically said that a political ad is most powerful when it accords with what the public already suspects about someone.

The public suspected that Romney was obscenely wealthy and didn't care about the disadvantaged. This is why the now-famous 47% video resonated so strongly:

Julia Gillard's knifing of Kevin Rudd and her immediate ascension to the Prime Ministership had an air of illegitimacy about it. So, when she promised not to introduced a Carbon Tax and then reneged on that promise, the cry of "Liar!" was always going to be damaging:

So, again: are these attacks on Barry O'Farrell and the insinuations that he is a misogynist going to stick?

I don't think so.

O'Farrell just doesn't have "the runs on the board' to make the allegation something that will fundamentally alter the community's perception of him in the same way.

That's certainly not to say that the comments in question were appropriate, or defensible. To give them some context, I've extracted them below.

First of all, the "hooker" comment:

Further on:

As for the "witch" comment:

The Kim Kardashian comments are a little more interesting. I recall them causing a fuss around the time that O'Farrell got into the habit of referring to Keneally in that way.

The first came on 8 November 2011, when Keneally was still sitting as the Member for Heffron:

Then, on the very next day:

And then, finally, on 14 February 2012, this happened:

All very unseemly.

When push comes to shove, I think this issue is going to disappear pretty quickly. Whilst Linda Burney is the acting Opposition Leader, Robertson will be back on deck soon, and the obvious opportunity afforded by her acting in the role will slip away.

What she will be hoping is that O'Farrell will keep making these kinds of comments, and that more articles on this topic get written. Unfortunately for her, I suspect that O'Farrell is a little too smart for that.

But you never know.

UPDATE: In fairness, thought I should include this exchange as O'Farrell has a response of sorts to what I have written above:

At the time of making this update, there had not been a reply to that last tweet.