The Claw – an inspiration (or “not all blokes named Dave misunderstand economics”)

The Claw is, undoubtedly a right legend. And a legend who is undoubtedly right.

he has a superb understanding of how housing supply affects housing prices and conditions, which was explored in his seminal work “The Parable of the Frozen Oranges”.

he has recently posted a more concise comment which, although superb, generated no response or comment in the deadpool of MB. It deserves better. It deserves reproduction:

It is most important (for the wellbeing of ordinary people) that the number of exta houses keeps up or exceeds the number of extra families.

When extra housing falls short of extra people, a housing shortage results. (We have a terrible housing shortage in Sydney and most parts of Australia).

When housing is in shortage, it becomes mathematically impossible for a number of families to attain independent housing – they must share or go without.

Being unable to attain housing is expressed and indicated in various ways:

* queues for social housing grow. Families must wait. A long wait indicates shortage.

* rents for housing become unaffordable. The high rent (compared to wages) indicates shortage.

* price to buy a house is out of reach. The unaffordable buy price indicates shortage.

To solve the shortage, politicians must ensure that supply of extra housing is matched to extra people (eg babies, children growing up, and of course immigration).

If politicians are to be fast and loose on immigration, then (for the wellbeing of ordinary people) they must also be fast and loose on housing supply.

However if politicians are to be stingy and mean on housing supply, then (for the wellbeing of ordinary people) they must also be stingy and mean on immigration.

The politicians get to choose these things. And voters get to choose the politicians. Think about this next time you vote.

https://www.macrobusiness.com.au/2021/06/first-home-buyers-locked-out-by-decade-of-sydney-undersupply/#comment-4137297

onya, Claw.

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harry

Yeah but he/she/they is a bit of a wanker.

Stewie

I didn’t know he came up with the Parable of the Oranges, if he did kudos to him. He does get the point with this comment:

“It is most important (for the wellbeing of ordinary people) that the number of exta houses keeps up or exceeds the number of extra families. When extra housing falls short of extra people, a housing shortage results.”

But that is sort of like stating the obvious.

Winning@Failing

Repeated acts of being a wanker, the claw has many acts of wank.

harry

Was a bit nasty in paying me out about firsts, I don’t mind being paid out, just not when it’s mean. Ermo can pay me out all he wants, but skippy is a cunt.

Anyway what, in the majestic scheme of things, does it matter?

DjenkA

Yeah but he/she/they is…

Terrible manners and outright aggressive to include only 3 pronouns!!!
Whatis this medieval behaviour in the 21. Century???

Freddy

The Claw doesn’t seem to understand how EZFKA works. Labor and LNP are two sides of the same coin, both captured by vested interests. It is the vested interests that set the policies like giving them even more of your superannuation money.

Your vote for House of Reps means nothing. The best you can do is vote for a minority in the Senate so that we maintain the status quo, and block cynical attempts to introduce policies like abolishing existing Responsible Lending laws.

Stewie

“The politicians get to choose these things. And voters get to choose the politicians. Think about this next time you vote.”

LOL “Vote” – ah sweet summer child, the Claw thinks it would actually make a difference! He has no idea how EZFKA works.

Last edited 3 months ago by Stewie
stagmal

you cant not vote here anyway, one of the few countries in the world that forces ya at the barrel of a gun to pokemon go to the polls. it’s an implicit admission nobody believes in the system and thinks its rigged – if we weren’t forced, nobody would rock up.

Stewie

The older I get the more incline I am to agree with you.

Gouda

If you really hate voting the best you can do is vote informal.

Still have to get your name checked off if you don’t want to get fined.

bjw678

one of the few countries in the world that forces ya at the barrel of a gun to pokemon go to the polls.

At the barrel of a wet lettuce leaf maybe. If you hypothetically weren’t on the electoral roll you can’t vote.

DjenkA

I don’t get the special wisdom in The Claw’s perspective.
It was said by everyone that excessive demand from dirty-cash Chinese investors, cheap’n’easy loans and undersupply/building restrictions was what was driving prices up. Some of these factors were more influential than others but none were trivial so….

stagmal

seems to have mostly been interest rates all along. the migrant rug has been pulled from under the housing market and there’s been no change.

really depressing. another MB thesis down the drain.

Ramjet

Not sure about the migrant rug being pulled. Yes, it has decreased, but we have got expats back in return for other temporary migrants going home eg backpackers.
The stimulus support is the other key factor here and it is extraordinary with grants, concessions.

bjw678

Produce unlimited supply and all else doesn’t matter. If someone can go and buy another house down the road then you no longer have the ability to charge ever increasing prices.

Freddy

My 2c is Banks are intentionally limiting supply side with an extraordinary level of extend and pretend. This will end post-covid and we get a corresponding extraordinary level of immigration to buy up the excess supply. This is the EZFKA way.

bjw678

The banks aren’t limiting supply, the land bankers are.
A former auto wreckers near me was bought out maybe 10 years ago and has sat there unused until recently when it was converted to housing. All this unused land is what’s creating the shortage.

Gouda

Claw was the guy who was always banging on about a shortage amirite?

I think it is a bit more nuanced than that.

My gut feeling is that the shitty investment grade apartments in capitals will crater, spurred on by concerns about flammable cladding, build quality concerns and difficulty getting loans. In contrast, landed property will continue to rise in popularity and that’s where we’ll see ongoing high demand and a shortage.

The difference is that it won’t necessarily be developers spending big on large blocks to subdivide as I’m aware of a few of them having issues with funding, but more so people looking for a larger family home in the context of covid, lockdowns and having to work from home. With WFH being here to stay, proximity to the CBD and work is less important so outer burbs and regional areas become affordable and viable options.

Before buying I had a discussion with a friend who thought should borrow the maximum amount ( > 1.5m) and use my entire savings as a deposit to purchase a house in somewhere like Toorak. Their reasoning was that I could pay it off over my lifetime, and one of their friends (on a much lower wage) recently bought an apartment in the area. Now the area wasn’t somewhere convenient for me, but the reality is that even with over 7 figures in savings, a house in that area was still out of reach. However, when looking at the apartments in the area I could get one and still have change from my eventual deposit – to me this further confirmed my hypothesis of an oversupply with that kind of property. 

Even though WFH is never going to be the majority of how I work, I know I needed a study as I do a lot of afterhours work related things at home. After purchasing, a family member had shared an article that stated studies and separate work areas were much desired and searched for by potential buyers for the WFH potential and that didn’t surprise me at all.

One thing that the pandemic has taught me is that living spaces are important. Know of too many families where both parents are trying to work from home and kids had to be homeschooled. Very hard to do in a townhouse where the kitchen/living/dining areas are all mushed into one, let alone an apartment where the soundproofing is likely to be of poor quality.

A lot also can be said about not having enough space and how this impacts relationships. Your average couple is away from each for most of the day, so being forced to lockdown and spend time with each other 24/7 during the pandemic has resulted in a lot of conflict and relationship breakdowns. On a more positive note I look at my own parents – still together since the 70s, but they’ve always had activities they do on their own and with their own friends. Even now they still have their own corners of the house which probably explains why the relationship has continued and that they weren’t at each other’s throats during Covid19.

Despite Morrison’s ongoing stuffups, the rest of the world believes Australia has done a good job at containing Covid so I can’t see overseas interest dying down once the immigration floodgates are reopened. One agent I know is getting a tremendous amount of interest from Hong Kong – where the rich are really rich and spending a few million on an Australian property to escape the CCP is a bargain. Martin North (DFA) and Edwin Almeida often comment about their WeChat contacts who are pushing towards landed property as opposed to apartments.

bjw678

The politicians get to choose these things. And voters get to choose the politicians. Think about this next time you vote.

This statement is massively naive.
Virtually all the politicians in parliament were chosen by the party leadership and all the politicians required to make policy were.

We just get to pick from this preselected list of pseudo choice.
Let people pick their enslavers and they are much more compliant.