The (apparently) never ending ponzi scheme

An interesting article on news.com.au on whether Australian house prices are too high. I thought the last section needed a little work, so I’ve fixed it.* Here it is, for your reading pleasure:

An industry spokesperson with absolutely no vested interest in growing property values said Melbourne and Sydney house prices were not a bubble, the very same day his organisation released figures revealing Melbourne home values rose 11.9 percent in a year.

Only Sydney recorded greater growth, with a 13.4 percent increase for the same period, substantially faster than incomes grew.

A real estate agent representative who was entirely unbiased on the topic said predictions of a decline in property prices were heavily focused on particular markets, like the vast majority of the metropolitan areas Australians live in, and paid far too much attention to logic and reality, such as people’s ability to pay down their mortgages during a single lifetime.

However, he was concerned first home buyers were illogically staying away from a property market much more expensive to buy into than 20 years ago.

“First homebuyers are nearly half of what they have been and that’s a major concern for those who have a vested interest in the market,” he said.

“Our ponzi scheme requires new suckers… I mean buyers… to keep the scam going… property market growing.

“Without a continued supply of fresh mortgages, prices will eventually stop growing and start to decline.”

In a pre-budget submission to the Australian Government, his organisation has called for first homebuyers to be allowed to access part of their government mandated retirement savings to keep the bubble growing.

“Since property has become too expensive for people to realistically buy into, retirement savings should be redirected into the market to prop it up,” he said.

“What safer place is there to invest your retirement savings than a bubble that has been growing faster than income for more than a decade?

“It’s not like bubbles ever burst.”

* This is satire and should not be mistaken for real commentary. All individuals and comments made by individuals in this work are fictitious. Any resemblance to the comments of real persons, living or dead, is purely coincidental.

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