18 months on, Macrobusiness loses a little naïveté, grumpily accepts the housing boom

After another 18 monthstm of denial, today the blokes at Macrobusiness seem to have understood what happens to EZFKA housing prices when interest rates are dropped and people, like, still need somewhere to live:

Why have I given up on it [the march of the property bulls]? Two reasons. The first is exhaustion with the younger generations. Today’s mortgage uplift is being driven by first home buyers. The much-hated specufestors are deleveraging. Nor are there foreign buyers driving up prices. It is now a bid solely from those that are most marginlised by property prices. If they want to bid them up again to the detriment of themselves then who am I stop them?


Of course, anyone that has been paying attention at any time in the last couple of decades will not be surprised – the effect of the policies of buyer rotation in the face of an ongoing shortage and constantly lowering interest rates in the EZFKA has been described ad nauseum and so was perfectly-fucking-predictable. As has the ridiculous naïveté that lower interest rates would possibly be counteracted by something (anything).

So, 18 monthstm ago, while everyone else was getting excited and convincing themselves that some sort of regulation would reign in the run of housing prices (ahahhahahahahahahahah!), sober people were making pretty pointed predictions:


The truth is, if you don’t constantly close your eyes to the reality, it’s not hard to see where things are heading. It is quite the mistake to confuse what you think should happen with what you think will happen especially if you want to be in the business of reading the economic tea leaves.

Another mistake is closing your eyes to politics and power relationships. More on that later, no doubt.