The worlds biggest housing bubble

The socialists down at The Age have as usual, found some interesting information about Australian housing affordability, but totally misinterpreted the meaning of that information.

Rather than speculate as to the unsustainable housing prices, and refer to them as a speculative bubble which has been driven up by credit expansion (thank you Reserve Bank of Australia !), The Age laments our sad state of affairs as something that has come to pass and shall never be undone, with the capitalism bashing headline:

High prices end Australian dream

Australian and New Zealand homes are the least affordable in the world, according to a US-based survey of 227 cities.

The 2008 Demographia study of international housing affordability listed 18 Australian cities in its top 50 of severely unaffordable markets.

The study rates housing affordability in the English-speaking nations of Australia, New Zealand, Canada, US, UK and Ireland.

What a bogus headline. The media should be talking about the housing bubble, not housing affordability. Because this gives an entirely different perspective and analysis.

This is not a problem created by the free market that needs to be rectified by government meddling.

Instead of describing the situation as some looming and persistent phenomena (of course the caring and benevolent folk down at The Age are always there to identify these) that requires massive and multiple government efforts to fix, you soon realise this is a mess created by government (the Reserve Bank of Australia) and that it can be easily fixed by free markets which will correct themselves once people's perceptions align with reality.

Housing is not something that always goes up. It is not a golden egg, or a perfect investment, but it is subject to something that the masses don't want to understand - *RISK*.

Do not assume it will always go up. People are financing beyond their means, dragging themselves into substantial levels of debt, because they assume that, as in the past, house prices will continue to rise.

Caveat emptor - buyer beware !

I predict the Australian bubble will pop by the end of 2008.