This is something generational and likely going to freak some people out, but the ageing population situation in Tokyo is creating holes in the urban landscape. As old people pass away, they leave behind apartments in which they dwelled, and because of the age of the buildings, have little resale value. This is creating a problem because the buildings start accelerating in their decrepitude as more people die and fewer people are there to support the body corporate sinking funds.
The thing about this is that a lifetime is spent paying off loans for a box in space and then the box loses value. That's the first problem. The second problem is that there is no real way to redevelop these buildings without public monies. It's beginning to turn into a spiral in Tokyo. This is instructive about what happens when a property bubble keeps out a generation of people from buying in and having kids. In a sense, the collapse of a younger population in Tokyo is a direct reflection of the property Bubble of the 1980s.
Not to say this is whites going happen to Australia's major cities. For one, our cities are not built to such densities, and for another, majority of the high density apartments are relatively new and so will not be spiralling down so soon. It takes a good 50 years for that to take place and that would be four decades away. The more problematic area might be that the ageing population will mean a higher burden on the fewer working generation who will be working from outside the major city centres while the inner city becomes predominantly grey.
It's weird but you can see it already in Sydney, where the people buying into the higher density closer to the city aren't first time buyers because they can't afford it. it's older couples downsizing or investing, and Sydney's urban metropolitan heart is already looking kind of grey.
Sydney's Housing Un-Affordability
Anyway... just how bad is Sydney?
The Harbour City's eye-watering house prices were trumped by only Hong Kong in the Annual Demographia International Housing Affordability Survey, which examined more than 400 cities in nine countries including the United States, United Kingdom, Australia and Canada.
After being sworn in as New South Wales Premier yesterday, Gladys Berejiklian used her first press conference to put the spotlight on housing affordability.
The report ranked middle-income housing affordability using a "median multiple" score, which is calculated by dividing the average house price by the average household income.
Anything with a score of 5.1 and over is dubbed "severely unaffordable", so let's break it down:
Rank: Least affordable City - Median multiple
- Hong Kong ..................18.1
- Sydney, NSW ..............12.2
- Vancouver, Canada ......11.8
- Santa Cruz, USA .........11.6
- Santa Barbara, USA.....11.3
- Auckland, NZ ..............10
- Wingcaribbee, NSW .....9.8
- Tweed Heads, NSW .....9.7
- San Jose, USA ..............9.6
- Melbourne, VIC ...........9.5
Hmmm. That looks far more insane than any chart I've seen up to this point. We know Hong Kong is nuts because it's essentially an island and a point and lots of land reclamation going on in the attempt to make more Hong Kong than God intended (so to speak). But Sydney to be leading the second pack of cities with multiples at roughly12 is pretty gaudy when London, New York, Tokyo, Paris, Rome and Berlin are entirely missing in the top 10. That's some list. The fact that Wingcaribbee and Tweed Heads makes the list tells you that something stupid is going on.
Our banks are lending money to people who want to have these multiples, just to live in these places. It has no bearing to the reality of any other real estate market on the planet except maybe Hong Kong,and so you have to say that Australian property owners and investors are collectively bidding up the numbers with no concern of the downside to the market, - which of course is a sign of a bubble.
Of course, Mark Latham has a radical plan to deal with this issue. He says, cut immigration.
Anyway, I just thought all that was interesting in light of yesterday's Berejiklian notion that supply would fix housing affordability. It most likely won't, and the longer they leave it, the worse the problem is going to be down the track.
To Un-Fuck The Goat Brexit
Things are getting a little convoluted with this Brexit thing. The Supreme court in the UK has just told the UK Government that Article 50 definitely can't be started by the government alone, it has to be put to the vote both houses.
After the referendum, it sure didn't look like there was an opening for overturning the result, but suddenly there's a puncher's chance of Brexit getting de-railed in Parliament. And if it did, well, would that really be a bad thing after all the sloppy lies that got it over the line?
It would be rather interesting should things come to pass that Brexit couldn't get up because Article 50 couldn't be triggered? They'll laugh in Europe; they'll probably even swear. David Cameron sure would. Of course, the MPs may well rubber stamp the thing to just let it through and out of their hair. after all who would want the furore that would follow a scuttled Brexit?
Of course, Mark Latham has a radical plan to deal with this issue. He says, cut immigration.
“[Housing affordability] is all about supply and demand. It’s not rocket science. The problem with extra supply in Sydney is the urban sprawl, the lack of infrastructure, the wretched traffic jams a million miles from the city centre, people struggling to get anywhere near for their schools, shops their employment. So, supply has the problem of sprawl”.
“[But] you’ve got to do something about demand. And whether we like it or not – and the two parties have got consensus about a Big Australia – the driver of housing demand in Sydney is immigration. The 200,000 a year plus immigration program – add to that the refugee program – that’s the driver of demand. And unless you address that, you can have all of the housing bonds, press conferences and forums that you like – and sort of puffy stuff in the media – and you won’t get a solution. So, break the consensus about Big Australia, slash the immigration program, drive down demand, and finally you will have a sensible solution to housing affordability”.
“You won’t have to spend as much on infrastructure funding because the place is not sprawling as much. And the other benefit you get is environmental sustainability. It’s something The Greens used to talk about, but now they talk about 50,000 to 100,000 refugees – they are Big Australia as well”.
“So, there is real room here for a sensible solution based on cuts to immigration”.That sounds like an oversimplification, but it's certainly one different view to add to the mix.
Anyway, I just thought all that was interesting in light of yesterday's Berejiklian notion that supply would fix housing affordability. It most likely won't, and the longer they leave it, the worse the problem is going to be down the track.
To Un-Fuck The Goat Brexit
Things are getting a little convoluted with this Brexit thing. The Supreme court in the UK has just told the UK Government that Article 50 definitely can't be started by the government alone, it has to be put to the vote both houses.
Lord Neuberger said the judgment was not about the referendum result or a comment on the merits of leaving or staying in the EU.
"The referendum is of great political significance, but the Act of Parliament authorising it did not say what would happen afterwards," Lord Neuberger said, meaning any action taken now must be in keeping with the UK’s constitution.
The Independent reported today that ministers are likely to be ready to publish the Bill that MPs will vote on by the end of the week.
After the judgement, Attorney General Jeremy Wright said the Government was "disappointed" by the final decision in its historic battle over who has the right to authorise the start of Brexit.
He added: "The Government will comply with the judgement of the court and do all that is necessary to implement it."
It is unclear what would happen legally if MPs vote against such a bill, as much of the constitutional law related to Brexit remains as yet untested, although Jeremy Corbyn has "asked" his MPs to vote not to obstruct it.
The judges' ruling is a victory for Gina Miller, a philanthropist and banker, who brought the case against the Government. She was also backed by a crowd-funded group called The Peoples' Challenge, who described themselves as a group of "concerned EU citizens".
Although the Government lost the challenge, the justices unanimously ruled that there was need to consult with the devolved powers in Scotland, Wales and Northern Ireland.Well that's a surprise and a half. Last we knew, 70% of MPs didn't want a Brexit, so this actually offers them a second bite at the cherry. Now, Jeremy Corbyn says he won't frustrate the government over invoking Article 50, but what if enough MPs banded together block it in the House of Commons? Or even if it passes there, what happens if the House of Lords shoots it down?
In a statement released immediately after the ruling, Labour leader Jeremy Corbyn said his party would not "frustrate the process for invoking Article 50" but would seek to amend the Government.
After the referendum, it sure didn't look like there was an opening for overturning the result, but suddenly there's a puncher's chance of Brexit getting de-railed in Parliament. And if it did, well, would that really be a bad thing after all the sloppy lies that got it over the line?
It would be rather interesting should things come to pass that Brexit couldn't get up because Article 50 couldn't be triggered? They'll laugh in Europe; they'll probably even swear. David Cameron sure would. Of course, the MPs may well rubber stamp the thing to just let it through and out of their hair. after all who would want the furore that would follow a scuttled Brexit?
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