tag:blogger.com,1999:blog-80861676796402350572024-02-21T05:06:55.508+11:00Land Values Research GroupEconomics as if location mattersGRPhttp://www.blogger.com/profile/06135577155466413315noreply@blogger.comBlogger166125tag:blogger.com,1999:blog-8086167679640235057.post-32716598276999378522019-01-30T13:47:00.000+11:002019-01-30T13:47:30.987+11:00Why might rents rise under Labor?
By Gavin R. Putland
The proper function of the property industry is to keep the
productive economy housed as cheaply as possible, so that investment
in future production is not crowded out by the cost of
occupying space — that is, by the cost of mere existence. To
serve this purpose, the property industry must itself be productive
— by building a plentiful GRPhttp://www.blogger.com/profile/06135577155466413315noreply@blogger.comtag:blogger.com,1999:blog-8086167679640235057.post-87435488601269508032016-06-22T22:24:00.000+10:002016-06-23T17:53:48.096+10:00SQM Research contradicts itself on Labor's negative-gearing policy
By Gavin R. Putland
The formerly respected SQM Research, in its report called
“Labor's
Negative Gearing Policy — A Market Viewpoint”
(22 June 2016), has joined the conga line claiming that requiring
future negative-gearers to invest in new homes would somehow
raise rents.
That claim is first made in the Summary (p.2):
Rental changes are initially likely to beGRPhttp://www.blogger.com/profile/06135577155466413315noreply@blogger.comtag:blogger.com,1999:blog-8086167679640235057.post-10212871026810021412016-06-09T21:35:00.000+10:002016-06-09T22:05:07.046+10:00REIA contradicts itself on negative-gearing policy (updated)
By Gavin R. Putland
Further to
my post
of 21 May, I note that the Real Estate Institute of
Australia (REIA) is now making two contradictory claims on Labor's
negative-gearing policy.
In mid May, the REIA launched its campaign claiming that if
negative gearing for future purchasers is allowed only for new
homes, rents
will rise, because:
(a) investors, including GRPhttp://www.blogger.com/profile/06135577155466413315noreply@blogger.comtag:blogger.com,1999:blog-8086167679640235057.post-35249037211304597012016-05-21T13:49:00.000+10:002016-05-23T17:43:51.557+10:00Whether limiting negative gearing to new homes would raise rents
By Gavin R. Putland
For the first time that this writer can remember, a major political
party is going into a federal election with a policy which, on its
face, is designed to reduce the rate of increase of residential
rents, allowing tenants' incomes to catch up with rents. The
Australian Labor Party is proposing to allow full deductibility of
negative gearing only for new homes, GRPhttp://www.blogger.com/profile/06135577155466413315noreply@blogger.comtag:blogger.com,1999:blog-8086167679640235057.post-66066359606763471882016-03-29T16:20:00.002+11:002016-03-29T16:23:04.193+11:00Could a 137-year-old equation explain the financial collapse?
By Bryan Kavanagh
The Australian Federal Treasury publication “Architecture of
Australia's tax and transfer system” (August 2008) made
a valid
observation:
While there are at least a hundred taxes, they all ultimately fall
on returns to owners of three possible factors of production; land or
other naturally endowed resources (R), labour (L) or
produced capital (K). The earningsGRPhttp://www.blogger.com/profile/06135577155466413315noreply@blogger.comtag:blogger.com,1999:blog-8086167679640235057.post-77521723977547683302016-03-21T09:26:00.002+11:002016-03-21T17:16:07.599+11:00Sinodinos takes new page from negative-gearing playbook
By Gavin R. Putland
Ever since full deductibility of negative gearing was reinstated in 1987, successive federal governments have pretended that the best way to help tenants is to give tax concessions to landlords — without making those concessions contingent on building houses or finding tenants. The current Opposition has belatedly promised to address the former shortcoming GRPhttp://www.blogger.com/profile/06135577155466413315noreply@blogger.comtag:blogger.com,1999:blog-8086167679640235057.post-60339561778426105712015-12-31T19:10:00.000+11:002016-01-01T11:38:50.304+11:00State capital-gains tax would pay for infrastructure and enrich property owners without fleecing the rest of us
By Gavin R. Putland
The benefit of a new or improved transport route, net of fares or
tolls paid for actual use, is shown in prices of access
to locations where that benefit is available — in other
words, land values. The affected locations include those
serviced by the new or improved route, or by other routes on which
congestion is reduced by the new or improved route. So theGRPhttp://www.blogger.com/profile/06135577155466413315noreply@blogger.comtag:blogger.com,1999:blog-8086167679640235057.post-36634597112683225122015-08-24T09:21:00.000+10:002015-08-24T11:52:09.675+10:00A ‘capital gain’ is a private tax
The noisiest campaigners for lower taxes complain only
about public taxes while ignoring or defending the unrequited
tributes collected by private agents under the guise of
market transactions. The noisiest campaigners for lower welfare
expenditure complain only about transfers that pass through the hand
of government, while ignoring or defending unearned private tributes
for which government GRPhttp://www.blogger.com/profile/06135577155466413315noreply@blogger.comtag:blogger.com,1999:blog-8086167679640235057.post-87391117162026101592015-07-17T16:12:00.000+10:002015-07-24T13:45:05.483+10:00How the Hawke-Keating government missed the boat on negative gearing
By Gavin R. Putland
The McKell Institute's report on negative gearing (Richard
Holden, Switching Gears, June 2015) concluded that negative
gearing for future investors should be allowed only for new
homes. I have been pushing that idea
since 2003. But the McKell report, in its account of the Hawke-Keating
government's brief quarantining of negative gearing (based on
contemporaryGRPhttp://www.blogger.com/profile/06135577155466413315noreply@blogger.comtag:blogger.com,1999:blog-8086167679640235057.post-82161824816311555292015-07-11T13:20:00.000+10:002016-05-29T20:59:12.880+10:00A ‘general formula’ for the price-rent ratio in a rational property market
How pro-speculation tax systems can lead to
“sub-intrinsic-value bubbles”
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The formula
In a rational GRPhttp://www.blogger.com/profile/06135577155466413315noreply@blogger.comtag:blogger.com,1999:blog-8086167679640235057.post-25390860262457357092015-07-08T09:19:00.000+10:002015-10-15T09:15:14.772+11:00Squaring the circle: The contradictory arguments against limiting negative gearing to new homes
By Gavin R. Putland
Of all the proposed reforms to negative gearing, the one with the
best chance of being supported by a major political party —
hence the best chance of getting through Parliament — is to
disallow or quarantine negative gearing on future purchases of
established homes, while continuing to allow full negative gearing
for new homes, and for past GRPhttp://www.blogger.com/profile/06135577155466413315noreply@blogger.comtag:blogger.com,1999:blog-8086167679640235057.post-73065225678061836142015-05-13T00:47:00.002+10:002015-05-13T09:31:42.664+10:00Housing investors party on like it's 2003
By Gavin R. Putland
Yesterday (12 May), the ABS released housing-finance figures
for March 2015 (ABS 5609.0). In the following graph, the
seasonally-adjusted value of lending for “owner occupation
(secured finance) - purchase of other established dwellings”,
aggregated quarterly and scaled to seasonally-adjusted GDP, is shown
in blue. The seasonally-adjusted GRPhttp://www.blogger.com/profile/06135577155466413315noreply@blogger.comtag:blogger.com,1999:blog-8086167679640235057.post-71453661691695202192015-05-05T20:51:00.001+10:002015-05-05T21:34:41.343+10:00Reply to Henry Ergas on negative gearing
Nothing to do with raising or minimizing taxes, says Gavin R. Putland.
Until a few weeks ago, the defenders of negative gearing (NG) preferred not to mention the possibility of limiting it to new homes, lest they give the idea any free publicity. Then, on 22 April — six days after the PM ruled out any changes to NG — shadow treasurer Chris Bowen pointedly left open the GRPhttp://www.blogger.com/profile/06135577155466413315noreply@blogger.comtag:blogger.com,1999:blog-8086167679640235057.post-50481701245809458182015-01-18T19:10:00.000+11:002015-01-18T19:32:14.009+11:00Do God-botherers lift residential property values?
By Gavin R. Putland.*
Suppose that a certain facility, e.g. a childcare centre or a
church, would take up a small percentage, say x percent by
value, of the usable land in a greenfield residential development. And
suppose that the presence of this facility, being desirable, would
add y percent to the selling price of the average lot in
the rest of the estate. Then, roughly GRPhttp://www.blogger.com/profile/06135577155466413315noreply@blogger.comtag:blogger.com,1999:blog-8086167679640235057.post-64145995652022540722014-11-07T07:00:00.000+11:002014-11-07T07:00:04.290+11:00Kavanagh-Putland index rises on Sydney investment binge
By Gavin R. Putland
Last year's release of the ‘Kavanagh-Putland index’ showed that the ratio of property sales to GDP was slightly higher in 2012-13 than in 2011-12. The RBA lowered the cash rate by 25 points in May 2013 and again in August 2013. Since then, lending for acquisitions of owner-occupied homes and investment homes, especially the latter, has continued to riseGRPhttp://www.blogger.com/profile/06135577155466413315noreply@blogger.comtag:blogger.com,1999:blog-8086167679640235057.post-65648923985325670452014-08-12T12:34:00.000+10:002014-08-12T12:38:04.443+10:00Housing: Are we maxed out again?
By Gavin R. Putland
The ABS Eight Capital Cities house-price index for the June quarter
of 2014 was released today (12 August). The index has been scaled
to per-capita GDP and plotted in red (top curve) in the following
graph.† The curve continues to rise,
but at a somewhat reduced rate. The last data point does not yet
reflect the change in GDP from Q1 to Q2.
On 8&GRPhttp://www.blogger.com/profile/06135577155466413315noreply@blogger.comtag:blogger.com,1999:blog-8086167679640235057.post-84251960127927722402014-07-16T23:00:00.003+10:002014-07-17T08:32:24.088+10:00How entrenched is negative gearing?
By Gavin R. Putland
According to pre-Budget leaks
reported
by SBS on 3 April,
and confirmed
by Louis Christopher on 9 April, Treasury and the Parliamentary
Budget Office have modelled a proposal to disallow negative gearing (NG)
on future purchases of established homes, while still allowing it for
new homes and grandfathering past acquisitions.
On 15 April, Jennifer GRPhttp://www.blogger.com/profile/06135577155466413315noreply@blogger.comtag:blogger.com,1999:blog-8086167679640235057.post-47733141244008436882014-07-10T13:32:00.000+10:002014-07-10T13:59:59.514+10:00Hours worked, balance of trade will hurt GDP
By Gavin R. Putland
In the following graph, the black curve shows the quarterly
percentage change in the total hours worked
(ABS 6202.0, Tab.19), while the yellow curve shows the
contribution of the change in the balance on goods and services
(ABS 5368.0, Tab.1) to the change in nominal GDP. All figures
are seasonally adjusted. For the balance of trade, the plotted point
GRPhttp://www.blogger.com/profile/06135577155466413315noreply@blogger.comtag:blogger.com,1999:blog-8086167679640235057.post-13236254511621144732014-05-14T00:27:00.000+10:002014-05-14T10:10:44.675+10:00Budget reply: A tax policy for full employment and affordable housing
By Gavin R. Putland
To start participating in the economy, you need two things: a job,
and a home within commuting distance of the job. The Australian
Government (whichever party is in power) deliberately makes both hard
to get.
Tax policies are designed not to help people find jobs and homes,
but to help property owners get further ahead without having to create
any jobs or supply any homes.GRPhttp://www.blogger.com/profile/06135577155466413315noreply@blogger.comtag:blogger.com,1999:blog-8086167679640235057.post-57457326298890456802014-05-01T15:59:00.000+10:002014-05-01T16:01:29.334+10:00For the record: Putland on negative gearing, CGT and the FHOG, 2003
In the last two years, all Australian states and
territories except the NT have decided to reduce or terminate the
First Home Owners' Grant for established homes. (The NT pays a premium
if the home is new or outside the designated urban area, but
has not reduced the grant below $7000 for established homes). One
option under consideration for the 2014 Federal Budget is to disallow
negative GRPhttp://www.blogger.com/profile/06135577155466413315noreply@blogger.comtag:blogger.com,1999:blog-8086167679640235057.post-66697785123538297432014-01-23T10:33:00.000+11:002014-01-23T10:33:39.578+11:00Prices, labour taxes and consumption taxes
Letter submitted
by Gavin R. Putland to the AFR on
January 21, in reply to
Greg Angelo
The myth that replacing PAYG income tax by GST would raise prices
(Greg Angelo, AFR Letters, January 21) is based
on the unwarranted assumption that the income currently withheld by
employers as PAYG tax would be paid out in wages, so that the business
income needed to pay the GRPhttp://www.blogger.com/profile/06135577155466413315noreply@blogger.comtag:blogger.com,1999:blog-8086167679640235057.post-68179786089137131412014-01-20T17:00:00.003+11:002014-01-20T17:09:41.993+11:00Howard blew his capital
Submitted text of
the letter in today's AFR
by Gavin R. Putland
“Big majorities never
last,” writes John Howard (AFR Letters, January 16),
“so political capital should be spent on a good
cause.”
When Howard finally gained control of the Senate, he spent his
capital on WorkChoices. This policy produced no discernible change in
the unemployment rate, GRPhttp://www.blogger.com/profile/06135577155466413315noreply@blogger.comtag:blogger.com,1999:blog-8086167679640235057.post-76884328467743115022013-12-24T15:31:00.001+11:002013-12-24T15:58:45.809+11:00Kavanagh-Putland index bounces on low interest rates
By Gavin R. Putland
In the Great Recession — better known in Australia as the
Global Financial Crisis (“GFC”) — the recession in
any one country was usually preceded by a fall
in property prices in that country. This in turn was
normally preceded by a fall in property turnover, as buyers stopped
believing in the greater fool while sellers tried to hold out. GRPhttp://www.blogger.com/profile/06135577155466413315noreply@blogger.comtag:blogger.com,1999:blog-8086167679640235057.post-49560112264367714512013-12-21T22:48:00.000+11:002013-12-22T10:11:32.834+11:00Investor-FHB imbalance approaches tipping point?
By Gavin R. Putland
On 10 December, the ABS released housing-finance figures for
October 2013 (ABS 5609.0). In the following graph, the
seasonally-adjusted value of lending for “owner occupation
(secured finance) - purchase of other established dwellings”,
aggregated quarterly and scaled to seasonally-adjusted GDP, is shown
in blue. The seasonally-adjusted valueGRPhttp://www.blogger.com/profile/06135577155466413315noreply@blogger.comtag:blogger.com,1999:blog-8086167679640235057.post-8111281803473572412013-09-19T18:20:00.003+10:002013-11-23T22:39:19.472+11:00Ramsey and Pigou: crypto-Georgists
Frank Ramsey was verballed,
writes Gavin R. Putland.
In 1902, the Congregationalist Cambridge mathematician Arthur
Stanley Ramsey married Mary Agnes Wilson, the socialist suffragette
daughter of the Vicar of
Horbling. They had two sons and two daughters. The younger son,
Arthur Michael Ramsey, born on 14 November 1904, became the 100th
Archbishop of Canterbury. The elder, Frank GRPhttp://www.blogger.com/profile/06135577155466413315noreply@blogger.com