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Wednesday, February 24, 2010:

Property spruikers can't Handel reality

By Gavin R. Putland

Today Rory Robertson is quoted in The Age as saying “There's extraordinary and ongoing rapid growth in the number of actual people in Australia with money wanting to own or rent houses ... while the underlying long-term trend in homebuilding remains flat near 150,000 per annum.”

For “money”, read “debt” — which is precisely the problem. And while the long-term rate of construction falls short of the alleged “underlying” demand, the assessment of “underlying” demand neglects the possibility of a sudden increase in average household size, such as can easily occur when distressed borrowers take in boarders (to help pay the mortgage) or return to the parental nest.

Arguments like Robertson's were prominent at the Australian Property Institute's State of the Market seminar, held in Melbourne on February 12.

The seminar opened with a video promoting the upcoming International Property Conference in Perth, with a soundtrack featuring an excerpt from Handel's “Hallelujah” chorus. Apparently no one told the promoters that when this most famous chorus in Messiah is heard in context, it is immediately preceded by the recitative “He that dwelleth in heaven shall laugh them to scorn; the Lord shall have them in derision” (Psalms 2:4), and the aria “Thou shalt break them with a rod of iron; thou shalt dash them in pieces like a potter's vessel” (2:9).

To which I can only say “A-a-a-a-a-a-amen...”

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