tag:blogger.com,1999:blog-7673758362916429937.post4244855538876459707..comments2024-03-22T20:18:45.865+11:00Comments on Jack Lacton: ALP to push up rent pricesJack Lactonhttp://www.blogger.com/profile/07297939283546740918noreply@blogger.comBlogger23125tag:blogger.com,1999:blog-7673758362916429937.post-3773352511424460482007-08-14T13:05:00.000+10:002007-08-14T13:05:00.000+10:00Actually Miike I suggest you take a look at the te...Actually Miike I suggest you take a look at the terms of the actual proposal not the straw man you would like it to be. It isn't a subsidy, it's a tax incentive based upon the investor meeting certain conditions - offering rental prices 20% below the market price to eligible families. State governments agreed to discuss stamp duty reform not abolish it; the states actually met their obligations under the GST agreements. Simply mouthing Howard/Costello spin makes you look as ignorant as they are.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7673758362916429937.post-57084084904012232532007-08-14T10:18:00.000+10:002007-08-14T10:18:00.000+10:00Never mind economics, let's just look at human gre...Never mind economics, let's just look at human greed. Charge what the market will bear. Landlords pretty much know it will bear current rental rates, because they are already collecting this. So, if they know there is subsidization, they know they can increase rent by close to the amount of subsidization. <BR/><BR/>You're assuming too, that this will get delivered. Stamp duty on housing was supposed to be abolished with the introduction of GST, but the Labor state governments have conveniently continued to double dip here.mike smithhttps://www.blogger.com/profile/09171606308312399761noreply@blogger.comtag:blogger.com,1999:blog-7673758362916429937.post-18701051269451459902007-08-14T10:15:00.000+10:002007-08-14T10:15:00.000+10:00"The solution is to release more land for new hous..."The solution is to release more land for new houses on the city fringe, and to create government incentives to build more inner city apartments."<BR/>Given you've just argued that the second part of your solution will push up prices you're not really making much sense. Or is it only if a conservative government offers the incentives?<BR/><BR/>We're so fortunate that the world's greatest economic minds inhabit Blogger, that land suitable for development isn't itself a scarce resource & that building new infrastructure out in the netherworlds costs absolutely nothing.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7673758362916429937.post-81353618608647113592007-08-14T02:00:00.000+10:002007-08-14T02:00:00.000+10:00It seems pretty obvious that this will push up pri...It seems pretty obvious that this will push up prices. We have X number of builders, and with current unemployment rates, it seems pretty obvious that not many are out of work. If the government policy means that they will all start building these slum suburbs, then other housing building costs will be driven up. To counteract that, the government would need to boost immigration of builders, to balance out building costs. Now, lets hear a Rudd/Union government boost immigration...<BR/><BR/>Populist solutions in the housing market will not help anyone. Look at the most screwed up housing market in the world, New York. Government intervention since the great depression, has left a housing market that is massively inflated for most, with a small few enjoying subsidised rent because they were lucky enough to be descendants of someone with a rent control apartment. Due to government ceilings on rental rises, investers never bothered to build housing, as their returns were limited. This over the course of 70 years, has created a massive shortage in housing, pushing up prices. <BR/><BR/>Socialism never works. The solution is to release more land for new houses on the city fringe, and to create government incentives to build more inner city apartments. Increasing immigration of tradies to reduce building costs would also help a great deal. If stock of all housing is increased, prices will fall across the board, helping the entire community.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7673758362916429937.post-4053153126266695272007-08-14T00:15:00.000+10:002007-08-14T00:15:00.000+10:00Rudds plan is to give tax breaks to companies who ...Rudds plan is to give tax breaks to companies who built low rent housing. Supply of housing stock for renters will increase. Prices will drop.<BR/><BR/>Jack has got it totally wrong, come one Jack, just admit it.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7673758362916429937.post-89282214576105361082007-08-13T23:34:00.000+10:002007-08-13T23:34:00.000+10:00The obvious answer to Jacks statement is that supp...The obvious answer to Jacks statement is that <B>supply wont increase</B> therefore <B>prices will increase</B>.<BR/><BR/>Given that previous interventions such as first home buyers grant resulted in the reduction of supply we are currently experiencing (and increased rents), it is reasonable to assume the building of housing to reduce rents will also reduce supply. <BR/><BR/>After all if you cant compete with someone building a reduced rent you will get out of the building market. Also most people building reduced rent housing will stop building normal housing for the duration.<BR/><BR/>This is <I>soooo</I> obvious its like zimbabwe printing money causing HyperInflation. Obviously the government cant compete with the private sector without a corresponding collapse of the private sector (building government funded low rent housing competing with normal housing building).Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7673758362916429937.post-50235726574493198252007-08-13T20:26:00.000+10:002007-08-13T20:26:00.000+10:00Jack, answer the question. Why will a measure desi...Jack, answer the question. Why will a measure designed to increase supply in a market push up prices?<BR/><BR/>You wont answer the question because you are wrong.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7673758362916429937.post-80951780754056230792007-08-13T20:10:00.000+10:002007-08-13T20:10:00.000+10:00Heh, heh, heh. This is fun.Take off the blinkers, ...Heh, heh, heh. This is fun.<BR/><BR/>Take off the blinkers, for gawdsake, and THINK. I know you can do it.Jack Lactonhttps://www.blogger.com/profile/07297939283546740918noreply@blogger.comtag:blogger.com,1999:blog-7673758362916429937.post-89591795317823687132007-08-13T20:06:00.000+10:002007-08-13T20:06:00.000+10:00"This is another clear example of the Labor Party'..."This is another clear example of the Labor Party's dearth of understanding of basic economics. If the government provides funding for any particular goods or services then the price will go up. It's pretty simple. Government provides a first home owner's grant - prices up. Government provides private health insurance rebates - prices up."<BR/><BR/>I think it is YOU who does not understand economics. Rudds plan is to increase the SUPPLY of a scarce resource (rental housing). Since demand for rental housing is not changed, this will lower market price. The reason that first-home owner grants and health insurance rebates don't work is because they simply heat up the DEMAND side of the equation without doing anything to expand supply.<BR/><BR/>A very simple concept, but obviously well beyond your grasp, dumbfVck. So much for "Aussie commonsense".Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7673758362916429937.post-10939560772402113332007-08-13T19:16:00.000+10:002007-08-13T19:16:00.000+10:00Gee Jack, just do it now. Tell us how a measure t...Gee Jack, just do it now. Tell us how a measure to increase the supply of something will also increase demand so that the price doesn't change.<BR/><BR/>Tell us tell us tell us tell us tell us.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7673758362916429937.post-44095094943592322182007-08-13T19:14:00.000+10:002007-08-13T19:14:00.000+10:00If nobody has answered this correctly in a day or ...If nobody has answered this correctly in a day or so then I will. In the meantime I recommend people deconstruct the previous statement and analyse its accuracy.Jack Lactonhttps://www.blogger.com/profile/07297939283546740918noreply@blogger.comtag:blogger.com,1999:blog-7673758362916429937.post-9663958641623618592007-08-13T18:57:00.000+10:002007-08-13T18:57:00.000+10:00No Jack, we can't spot the flaw in the logic. Lab...No Jack, we can't spot the flaw in the logic. Labor are saying they will offer incentives to increase the supply of low income housing. We cant see why that will push up rents.<BR/><BR/>Please tell us Jack.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7673758362916429937.post-25920699578392938602007-08-13T18:06:00.000+10:002007-08-13T18:06:00.000+10:00Is that how it works, Anon?"BUT this is for supply...Is <I>that</I> how it works, Anon?<BR/><BR/>"BUT this is for supply to be increased. Supply up, demand the same."<BR/><BR/>Tick, tick, tick. Can anyone spot the flaw in the logic?Jack Lactonhttps://www.blogger.com/profile/07297939283546740918noreply@blogger.comtag:blogger.com,1999:blog-7673758362916429937.post-20498553717997960642007-08-13T17:58:00.000+10:002007-08-13T17:58:00.000+10:00Yep but Jack, the simple point is:- You stated Lab...Yep but Jack, the simple point is:<BR/><BR/>- You stated Labors plan would push up rents.<BR/>- If this was an across the board subsidy to renters, who then competed for the same amount of stock, then yes it would : demand up, supply the same.<BR/>- BUT this is for supply to be increased. Supply up, demand the same.<BR/>- Your statement that it will put up rents is simply wrong.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7673758362916429937.post-12112600011176433742007-08-13T17:41:00.000+10:002007-08-13T17:41:00.000+10:00Let's just be really clear because there are a bun...Let's just be really clear because there are a bunch of Crikey readers who've linked to the article who think that because I'm against the policy Labor announced I must be for the current policy.<BR/><BR/>1. The First Home Owner's Grant is a stupid idea.<BR/>2. The health insurance rebate is a stupid idea.<BR/><BR/>I'm against any use of taxpayer money to prop up these types of idea. Thus:<BR/><BR/>3. Labor's proposal to gift rental subsidies to 50,000 lucky householders (they'll never be kicked out, will they?) is a stupid idea.Jack Lactonhttps://www.blogger.com/profile/07297939283546740918noreply@blogger.comtag:blogger.com,1999:blog-7673758362916429937.post-79982236023404956282007-08-13T17:11:00.000+10:002007-08-13T17:11:00.000+10:00At first the impression I had was that this would ...At first the impression I had was that this would have a similar effect to the first home owners grant, however I soon realised that this would only be true if it applied to existing housing stock. By only applying to new housing stock this will stimulate an increase in building activity and reducing the shortfall between new dwellings and housing demand growth which is increasing housing affordability problems.<BR/><BR/>It seems to me so far that Labor's housing policies seem to be carefully focused on the supply side problems of housing affordability rather than demand producing methods such as the ill conceived first home owner's grant.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7673758362916429937.post-6457022104162387582007-08-13T16:33:00.000+10:002007-08-13T16:33:00.000+10:00Good on you Jack - you can recognise economic ille...Good on you Jack - you can recognise economic illerates when you see them and none quite so bloody obvious as Howard and Costello with their First Home Owners thingumee and health insurance rebate amongst many other irresponsible handouts.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7673758362916429937.post-81917034437019617502007-08-13T15:31:00.000+10:002007-08-13T15:31:00.000+10:00You're wasting your time other anon, Jack's dabbli...You're wasting your time other anon, Jack's dabbling in hackonomics; the first principle is that whatever measure you use interest rates will always rise under a Labor government.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7673758362916429937.post-62124685477717190202007-08-13T14:00:00.000+10:002007-08-13T14:00:00.000+10:00Rudd's talking about funding the supply of new ren...Rudd's talking about funding the supply of new rental housing stock in targetted grants. Supply increases, price goes lower.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7673758362916429937.post-5170359998418232642007-08-13T13:17:00.000+10:002007-08-13T13:17:00.000+10:00Gawd help us.I thought it was pretty clear that my...Gawd help us.<BR/><BR/>I thought it was pretty clear that my point was the result would be the same whether the incentive is to the renter or the provider and that it was within the framework of only being aimed at a specific market sector.<BR/><BR/>Health insurance support is provided to a specific sector, too. The result? Prices up.Jack Lactonhttps://www.blogger.com/profile/07297939283546740918noreply@blogger.comtag:blogger.com,1999:blog-7673758362916429937.post-2063582199289735352007-08-13T12:07:00.000+10:002007-08-13T12:07:00.000+10:00And your response suggests you should go back & en...And your response suggests you should go back & enrol in any compulsory economics subjects as you are unable or unwilling to distinguish between supply & demand, nor apparently are you able to read. They are proposing a tax incentive to offer a certain product (discounted rental housing) to a specific sector of the market, not a straight up cash incentive to builders. You could well have made the case that it would distort the market via<BR/><BR/>"... the outcome has to be exactly the same ..."<BR/><BR/>Why? Because your ideological predisposition demands it? Hyperbole is no substitute for a working brain but you are certainly giving it a decent shake.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7673758362916429937.post-89993684981419954262007-08-13T11:13:00.000+10:002007-08-13T11:13:00.000+10:00I hate to tell you this but the outcome has to be ...I hate to tell you this but the outcome has to be exactly the same as the First Homeowners Grant and health insurance rebate.<BR/><BR/>Using the example of the homeowner's grant - The result has been an increase in housing prices due to a straight out cash incentive. How would that differ from providing home builders with a tax benefit (or investment incentive, to use your term) that provided the same amount to the purchaser?<BR/><BR/>Answer? It wouldn't.<BR/><BR/>Your response is one of the reasons that economics should be a mandatory subject in school (along with statistics so we could deal with the global warming hooey).Jack Lactonhttps://www.blogger.com/profile/07297939283546740918noreply@blogger.comtag:blogger.com,1999:blog-7673758362916429937.post-49954436481811133402007-08-13T11:02:00.000+10:002007-08-13T11:02:00.000+10:00Actually I'd say it is you who doesn't seem to und...Actually I'd say it is you who doesn't seem to understand economics. Labor is proposing investment incentives focused on increasing the supply of rental properties in the lower priced segments of the market. This is quite distinct from subsidising demand in a way that quickly translates to higher prices, as is the case with the First Homeowners Grant and the 30% health insurance rebate.Anonymousnoreply@blogger.com