The media must have more schizoid personalities within its ranks than the hordes of muttering nutters hanging around the CBD with a brown bottle in one hand and poo from inside their pants in the other.
One moment, the news is screaming about a "housing affordability crisis" with first home buyers being locked out of the market. Boo-hoo. I'm one of them, and I'm not complaining. It's a market. It's not meant to be nice or a social justice tool. It's a device for setting prices at the appropriate level. Market clearing prices. If you don't understand the concept of market clearing, shut up and go and read an economics text book. Or just shut up and go back to reading comics.
One day later, the same media is in a lather about house values in freefall and mortgage defaults going up.
To me, the only way to increase the affordability of housing is to reduce the price of it. So if you think there is a crisis, then values going into freefall is a good thing. I'm certainly hanging on here waiting for a few more interest rate rises in the hope that it will knock the props out from under the local market. I could do with paying $600,000 for a house rather than $800,000. Wouldn't you?
Too bad if you are selling, but that's the nature of the market. It doesn't owe you anything.
I just wish that more readers of the fish wrappers would wake up and realise that the media doesn't give a damn about rising interest rates or plunging house values - they just care about whipping up enough hysteria in order to sell more fish wrappers. Whatever you think of Mark Latham and his article in the Fin Review yesterday, he did hit the nail on the head when it comes to the "manufacturing of crisis".
He's right - there is no housing affordability crisis. When we last moved, we had a simple choice. We could pay more money to live in our preferred area, or we could move further out into bogan-land and pay less and possibly get a bigger house and block. We could go right out into the boonies and pay about half what we are paying now and live in a McMansion - 4 or 5 bedrooms, enough bathrooms for Cleopatra and a garage that would hold the entire Sydney taxi fleet. Only problem is that a place like that is pretty much closer to Canberra or Bathurst than it is to Sydney. And I hear that the neighbours have six fingers and smell. They're the type of people that eat each other's ear wax for breakfast.
There are plenty of places available out there, and they are cheap. But it means a trade off for us in terms of amenity. We'd face a longer drive to get Junior to school - or he'd have to change schools. I'd face a longer commute. The places we enjoy going to would be further away. We'd have to put up with a longer drive to get to leisure activities, or stop going to them and switch to activities closer to our new abode. Friends and family would not be an issue, as they are already scattered all over Sydney and NSW.
The thing is, why should the government have to step in to ensure that I can get to Bondi in 25 minutes rather than 45? Why should some other poor sap have to subsidise my leisure time? We made a choice to stay here and pay more, because the things we do around here are worth the extra money, and we can afford to pay that little bit extra. If you can't afford it, well, tough shit. Not my problem. Not the government's problem either. It's your problem. Do what I do - work long hours, build up a pile of valuable skills and experience and get paid well for your endeavours. Don't go hog wild with debt and live within your means. Like I said, if you can't do that, then take your problems and fuck off. Go and talk to someone who cares, because I certainly don't.
As for an increasing level of defaults, I also see that as a good sign. It means that all the poor quality mortgages are being cleaned out. Those completely crap mortgages to people that couldn't afford them are a symbol of the "wall of money" that surged into the market over the last decade and bid up prices to silly levels. Defaults to me say that the tidal wave of money should be drying up, meaning that a lot of pressure will be taken off house prices. (I wish).
Rising defaults to me are also a sign that the "bell hop" moment has come and gone. By "bell hop", I refer to the old saying that when the bell hops (or taxi drivers) start offering you share tips, it is time to get out of the market. It's over heated, and a stack of idiots and their money have invaded. Those now defaulting are the idiots of the housing market. They need to be cleaned out for normality to return. That can be a nasty process, but it is not the job of the market to be "nice". It is the job of the market to be efficient.
Heartless bastard, signing out.
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