Saturday, 31 January 2009

Let's build lots of empty buildings

The latest wheeze by our overlords and masters is to spend our tax money on propping up the commercial property sector.

I suspect arms have been twisted by the likes of the BLF (or whatever they call themselves these days) in order to keep union construction workers on high paying rackets.

Prime Minister Kevin Rudd says the Government will pay for half of the plan to help finance commercial property projects, including housing developments, shopping centres and office buildings.

Just who is going to occupy those shopping centres and factories and office blocks once they are built? If anything, the vacancy rates for existing commercial properties are about to go up. Why dump more property into a market that is softening? Don't they realise that this is how markets work? When demand dries up, supply should automatically be cut off by the market. It makes no sense at all to increase supply when demand is flat or falling.

If this one action doesn't convince you that we are ruled by economic illiterates, nothing will. When government starts interfering like this, you end up with white elephants that are never occupied, and end up being bulldozed 20 years down the track after they become blighted and horrible from lack of maintenance - for without a rental income, no maintenance can be performed.

The Urban Taskforce's Aaron Gadiel has welcomed the plan to unlock credit for developers.

Developers? They're going to support nasty, grasping, greedy, profit-driven, Rolls Royce-driving, trample on the underclass, uncaring, urban sprawling, habitat destroying, white shoe brigade developers? I thought developers were the spawn of Satan to the left, profiteering at the expense of the "little guy". Why haven't the Greens gone nuts at this? Every other time they see any sign of government support for evil capitalist developers in this neck of the woods, they go ape shit.

The market for apartments in Australia has turned to crap. Prices are dropping rapidly. Why should this encourage the government to step in and provide support? I know they are trying to link this to support for "affordable housing", but if they think there is a linkage there, they have rocks in their heads.

Think about where a lot of the apartments are built - areas like the Gold Coast and the Sunshine Coast. Apartments there sell for millions of dollars. Many are bought by "speculators" and landlords, and are then rented to holidaymakers. Building more apartments on the Gold Coast for the family holiday market is hardly going to fix the "affordable housing" problem in inner city Sydney. Especially when fewer families are likely to be taking holidays for the next few years. Apartments are not being built at present because there is no demand for them. Or at least nothing like the demand that was there 2 years ago.

A hell of a lot of apartments that have been built in recent years have been snapped up by investors using negative gearing. I personally know a couple of blokes in their 50's who were worried about their lack of superannuation, so they borrowed half a million and bought some cheap apartments. Do we really need to prop up landlords? (Having been an apartment owning landlord, I feel I have some right to comment on this). What goes up can just as easily go down. When you buy an asset, you accept that there is a downside risk as far as the price is concerned. I didn't think that a left leaning government would feel that they have a duty to support "speculators" with money taken from "battlers".

Once again, Krudd shows that he has a shakey grasp of reality.

On top of that, the construction industry uses lots of cement and steel - two products that produce a lot of greenhouse gases when they are manufactured. Can anyone see the irony in a government that aims to cut greenhouse gases actually propping up an industry that pump out lots of those self-same gases?

This mob don't know whether they are Arthur or Martha.

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