News from au.com

[william the wie]

I check on Australian real estate prices from time to time to figure out what is going on inside of China. Given the three or more sets of books used in China and their lack of independent verification Australia is about the only window into China. After reading a column about China's upcoming five year plan in MarketWatch I went to au.com's property section and saw two stories about the current 0.2% "dip" in the housing prices in state, territorial and federal capitals. Well instead of a dip when I read the story I found out that properties in Perth had 4.8% this year. To me that sounds like a crash. As recently as last year A$28K was available for first time homebuyers in parts of the Sidney-Canberra-Melbourne corridor. That was about a 20% downpayment on a starter home for a frugal buyer yet affordability was a major problem still. With the state and federal subsidies now a fond memory something had to give.

The other story looked even more suspicious on closer examination. Bungling state bureaucrats change plans for a transport corridor and buy a row of ocean front homes and then oops they find out they find out that they can only get federal approval for the earlier inland corridor. Since when does anybody buy waterfront property to put a road right on the beach? All I can figure is that this was some sort of attempt to maintain real estate taxes and values in all of Queensland so the bureaucrats would not be laid off. Something is most likely going wrong in China since Australia and Brazil are China's main suppliers of raw materials