Malaysia's Online Poll: What The People Are Saying

The Star newspaper in Malaysia have one of the highest readership of English news in Malaysia and every now and again they conduct an online poll on certain "hot" topics to see what their readers think of that particular hot topic. Here are a few interesting ones with the poll results and my opinion on the topic.  Please leave a comment if you have any views on any one of the following survey topics.

In which language should Mathematics and Science be taught in secondary schools?

Bahasa Malaysia
59% (90141 votes)

English
38% (57213 votes)

Let students decide on their choice of language
3% (4166 votes)
Total 151520 votes

Comment [DN]: I guess the only reason why you would teach Maths and Science in Bahasa Malaysia is because Malay is the national language. That would be the only reason as far as I can see. You can only use Bahasa Malaysia in Malaysia (and maybe Indonesia) but if the students chose to go overseas say mid way through secondary school, they're screwed as they will have to relearn everything in English if they were going to a school/ college/ university in countries like USA, UK, Australia, Singapore etc. as most do.



Should the controversial sex video implicating an opposition leader be screened in Parliament to enable MPs to determine the identity of the man in the clip?

Yes
88% (6914 votes)

No
12% (952 votes)
Total 7866 votes

Comment [DN]: What business is it of the MP's to determine the identity of the man in the clip? What they need to do is work to improve the country by improving efficiency, increasing productivity, stemming out corruption and ensure the poor are given a helping hand and not waste time identifying a dirty old man dong something sleazy on video. The Malaysian voyeuristic tendencies seem to be exposed quite glaringly here.




Do you agree with Kinabatangan MP Datuk Bung Mokhtar Radin that women are lousy drivers?

Yes
42% (4588 votes)

No
58% (6460 votes)
Total 11048 votes

Comment [DN]: Well there are bad drivers on both genders aren't there? I know it's a common theme we hear all the time that women are bad drivers but statistics show more men get into vehicle accidents than women do. Has there been research done to show that women are lousy drivers (compared to men)?




The minimum annual income to be eligible for a credit card has been increased to RM24,000? Do you agree with this?

Yes
38% (8139 votes)

The minimum income should be not less than RM36,000
30% (6529 votes)

The minimum income should be not less than RM48,000
23% (5061 votes)

The minimum income should be retained at RM18,000
9% (1875 votes)
Total 21604 votes

Comment [DN]: The higher the better as far as I'm concerned. Credit is just too easy nowadays. Combine that with people who don't yet know the concept of "spending within your means" equals a dangerous mix that could end up in real pain.




Do you agree that it is time to remove the ethnicity (“Race”) category on forms issued by the public and private sectors?

Yes
86% (15425 votes)

No
14% (2440 votes)
Total 17865 votes

Comment [DN]: Race is irrelevant and should be removed from all forms. It's a disgrace that many times when filling in forms in Malaysia, they ask you to state your race which gives no value and totally unrelated to the matter at hand.




Do you think that having a TV screen in vehicles could lead to road accidents?

Yes
48% (10709 votes)

No
52% (11580 votes)
Total 22289 votes

Comment [DN]: TV screens in vehicles are ok for the back passengers to watch but should not be installed in view of the driver as that would make the likelihood of an accident much much much higher if the driver was watching the TV while driving. Studies have proven that and anyone with 10% of a brain knows that.



Do you think that it's time to implement the concept of plea bargaining in Malaysia?

Yes
62% (4250 votes)

No
38% (2576 votes)

Total 6826 votes

Comment [DN]: Hard one but I think not. Too many a time criminals have gotten away with bloody murder because of this. I say hard one because obviously we would like to lock up as many of these scums as possible but we would not like lazy prosecutors to let these guys go with less than what they deserve. When a case can be proven, the defendant should never be offered a plea bargain.




Should university students be allowed to actively participate in politics?

Yes
48% (3949 votes)

No
52% (4266 votes)
Total 8215 votes

Comment [DN]: Why not? As long as they are not doing anything illegal or immoral they should have the free choice to do anything they want within reason. If a school drop out can get involved in politics and why can't a University student? Are we not living in a free democratic society? Well maybe not according to 52% of respondents.




Should the retirement age in Malaysia be raised to 60?

Yes
53% (11288 votes)

No
25% (5326 votes)

The retirement age should be raised to 65
22% (4586 votes)

Total 21200 votes

Comment [DN]: In this day and age the retirement age should be prolonged to 65 and beyond. Retirement at 55 years of age is too young. While it makes the employment figures look good for the government, it does nothing to the retirees who will have to depend on their paltry EPF for another 30 years.




Would you consider the building of a nuclear power plant as the best option to cater for Malaysia’s energy needs in the future?

Yes
56% (10379 votes)

No
32% (5833 votes)

I need more information on the proposal
12% (2260 votes)
Total 18472 votes

Comment [DN]: While nuclear energy is absolutely clean, it is also tremendously expensive compared to other forms of energy and until someone can tell me how to safely dispose of nuclear waste, I'm totally opposed to nuclear energy. Take Japan recently as a good example, if things go wrong, it could really go wrong.




Should Pulau Redang - which is rated as one of the world’s most beautiful islands - be turned into a getaway for the rich, with hotel rooms costing no less than US$500?

Yes
9% (1832 votes)

No
52% (11166 votes)

The cheaper chalets and hotels should still be allowed to operate
39% (8464 votes)
Total 21462 votes

Comment [DN]: It will be a sad day on earth when the almighty buck keeps ordinary Malaysians out of Pulau Redang, one of the most beautiful Islands on earth. The Island belongs to all Malaysians, hence everyone should be able to enjoy it's beauty.




Do you think that forming a special inter-faith committee can help promote religious understanding and harmony in Malaysia?

Yes
43% (4712 votes)

No
57% (6183 votes)

Total 10895 votes

Comment [DN]: Unfortunately, many believe (me included) that the Interfaith Committee is all smoke and mirrors and a diversion from the real issues. In Malaysia, race and religion are too intertwined with politics where the government use race and religion to stoke the flames of the different groups of people to their political gain. Disgraceful!




Are you willing to spend between three and 10 times more on energy-efficient bulbs as your contribution towards reducing carbon emission and saving the environment?

Yes
72% (5413 votes)

No
28% (2074 votes)

Total 7487 votes

Comment [DN]: So pleased with the survey results. I am too. I love our environment and we should stop abusing it so whatever I can do, I'm all for it even if it costs 10 times more!!




Should Malaysia adopt a minimum wage plan?

Yes
84% (10232 votes)

No
16% (1983 votes)

Total 12215 votes

Comment [DN]: Good and bad about minimum wages. I can give good reasons for not having a minimum wage but in Malaysia's case, because the standard of living is so low, I would support fully a case for a minimum wage. A minimum wage is ok, but if it's too high it can lead to higher unemployment and be problematic for businesses.




Do you agree with Tun Dr Mahathir Mohamad’s claim that the Sept 11 attacks on the US could have been staged as an excuse to mount attacks on the Muslim world?

Yes
25% (6716 votes)

No
75% (20185 votes)

Total 26901 votes

Comment [DN]: Dr M is a nut case. Enough said.





Should banks subsidise the RM50 service tax for credit cards?

Yes
80% (15058 votes)

No
8% (1460 votes)

Consumers should be wise and only keep credit cards they require
12% (2197 votes)

Total 18715 votes

Comment [DN]: Of course everyone would like to pay less tax but why should a bank pay your tax for you? You request for a credit card, you get it and use it and there is an associated service tax with having that credit card, so why would you think other people should subsidize you?




What is your view on rapper Namewee's video, which pokes fun at TNB?

It is not in our culture to do something like this
8% (2934 votes)

Namewee is only making a point about TNB's services
92% (31808 votes)

Total 34742 votes

Comment [DN]: If a rapper wants to poke fun at a company, what is wrong with that. Heard of freedom of expression?





How much should a Filipino domestic helper be paid?

Not more than RM600
46% (4165 votes)

RM601 to RM800
28% (2570 votes)

RM801 to RM1,000
14% (1233 votes)

RM1,001 to RM1,200
4% (393 votes)

RM1,201 to RM1,400
7% (670 votes)

Total 9031 votes

Comment [DN]: While many Malaysians would like the convenience to have their dinner cooked, housed cleaned and constant help with the children 18 hours a day, 6/7 days a week many are only willing to pay RM600 (US200) per month for this privilege. Malaysians are getting more and more affluent but it seems financial equality is not top on their agenda. Well if financial equality is too much to ask for then how about fairness for the pain, toil and sweat most maids go through?

More on the Housing Bubble

by Kris Sayce

According to Money Morning reader, Bill the word used in knitting isn’t “pearl”, but rather it’s “purl”.  No wonder we were so bad at it if we couldn’t even get the basics right!

Apologies to knitters everywhere.

Get in now, before it’s too late!  This morning, Eric Johnston at The Age writes:

“Prospective borrowers have been urged to get a home loan while they can.”

Although, after reading the article, we’re still trying to figure out who’s doing the urging.

It can’t possibly be Matthew Davison of Merrill Lynch.  He’s quoted by Mr. Johnston saying:

“We believe the strain on the household budget is too big to ignore, and banks don’t accurately measure household costs.”

That’s hardly a ringing endorsement to encourage someone to take out a $400,000 loan.

Perhaps it was something else Mr. Davison said:

“These pressures could possibly prompt the banks to update household budget models, thus tightening mortgage lending standards.”

Again, it’s not what you’d call urging someone to load up on debt.

But we’re not going to pin the blame on Mr. Johnston.  We’re not 100% sure how things work in newspaperland.  But we believe the journalist writes the story and the sub-editor comes up with the headline.

In this case, the sub-editor has come up with a headline that directly contradicts the story.  But that doesn’t surprise us.  Given the huge amount of advertising revenue the papers get each month, the mainstream press has a vested interest in holding off the property bust as long as possible.

And if that means encouraging more people to take out huge loans now, just as the market has turned down, then so be it.  After all, they were happy to cajole punters into the market at the peak, so why not when property is just a little bit cheaper!

Trouble is, it’s gonna get a whole lot cheaper.

Half-priced millionaires’ row

Before we crack on, two other gems sent in by readers.  First this sent by Money Morning reader, Greg, “Hedges still millionaires row despite drop”.

The article notes:

“Four years ago, before the global financial crisis hit, 199 Hedges Avenue fetched $17.5 million.  This month the four-bedroom, six bathroom, beachfront home [Ed note: marvellous water views?] in Mermaid Beach reportedly sold for almost $8 million.”

A quick bash of the Canon LS-100TS calculator tells us that’s a price drop of – [gulp] – 54%!

Amusingly, the articles states, “Mr Newlands [chairman of the Real Estate Institute of Queensland, Gold Coast] said property on Hedges Avenue would always remain popular and at the high end of the market.”

Obviously not popular enough for the seller who has taken a 54% bath.  That’s where the spruikers have made their fatal error: assuming higher prices are sustainable because an area is popular.

Then Money Morning reader Natalie dropped us this email saying:

“Did I hear David Airey from Real Estate Institute of Australia wrong?  The ABC read his statement as saying there is ‘no housing shortage in Australia.’”

Click here for the link and decide for yourself.

Here’s a transcript of Airey’s comments:

“I don’t think there’s been a bubble, and I don’t think there’s any bubble to burst.  The indicators are that this has been a very slow softening but with the huge increase in the number of established homes for sale added to properties off the plan sales continuing to rise, we’ve just seen a lot of stock which isn’t moving.”

Property spruikers have to tread a fine line.  Using their own supply-and-demand theories for why property prices had to rise, they’ve backed themselves into a corner.

Because using the same supply-and-demand argument you would logically have to say prices will fall… Instead the spruikers have to keep running with the “there’s no bubble” argument.  Even if it means ditching the claim about a housing shortage.

That way they can claim prices didn’t really go up – even though they said they did – and therefore if prices didn’t really go up then they really can’t go down.

Even though the proof is evident in Queensland where prices have fallen by 50%, and even Melbourne where prices fell 6% in just one quarter!

For some reason, every time a spruiker talks we keep hearing circus clown music!

Idiot editor

But still, the spruikers don’t like hearing what we’ve got to say.  Ex-Money Morning reader Michael sent this note today:

“Your [sic] an idiot!!!

“Please unsubscribe me from this fools [sic] emails.

“The scribes are right, you don’t understand the housing market, and its [sic] blatantly obvious by this ridiculous tirade trying to disprove economics 101 – Demand & Supply.

“Cheers,
“Michael.”

And this from Money Morning reader Rob:

“Please tell Sayce to stop blathering[…]

“its [sic] becoming an embarrassment, he’s like a bogan amongst uni students[…]

“he is really showing how clueless he is about Economics, he’s just a trader from London, for heaven’s sake[…]

“do you have nay [sic] idea why he is so anti-property?? more people have become wealthy through property than any other medium, its [sic] slow now, but who cares, property investors are long term[…]

“his ignorance is turning him into a celeb, like that kid from Melbourne.”

Thanks for the advice guys.  But we don’t need any schooling in economics.  Any branch of economics that believes in never-ending price rises and mythical housing shortages, is something we can do without.

Besides, we’re quite happy with what we’ve picked up ourselves.

As for demand and supply, again we point out that demand and supply isn’t just about demand and supply.  It’s about quantity and price too.  Ignore that at your peril.

Not only that, but we dispute the idea that property makes people wealthy.  Sure, there’s a period from the early 1980s to the mid-2000s where many did well from the inflationary credit-fuelled bubble.

But we don’t see that it’s made people wealthy.  In fact, we argue the opposite.  We argue that most who benefited from the property boom believed it would last forever.  So what did they do?  That’s right, they took their winnings and leveraged it up again on the false dream of negative gearing.

Wealth is only real wealth if it’s tangible.  Equity in property isn’t tangible.  For most property investors, if they liquidated their portfolio today and paid out all their debts, they’d barely be any better off than when they started.

In fact, those who started within the past five years are likely to be significantly behind when all costs are taken into account… property as a wealth builder?  Do me a favour.

Your house isn’t an investment

And finally, we find we’re in the strange position of agreeing with a banker.  Bank of America [NYSE: BAC] CEO, Brian Moynihan is quoted saying:

“It’s sobering to think, but some people shouldn’t be thinking of (their home) as an asset.  They should be thinking of it as a great place to live.”

We couldn’t agree more.  We’ve said it for years.  And mostly we’ve been ridiculed for saying it.  But that won’t stop us.  Owner-occupied housing isn’t an investment.  It’s an expensive consumption item.

Once you ditch the idea that a house is an investment you’ll realise it’s just not worth paying the current ridiculous Ponzi credit-fuelled prices that houses are selling for right now.

There's Nothing Generic About Housing

By Kris Sayce

In today’s Money Morning: Words from a credible analyst… Knit one, pearl one… Fairy tales dressed as fact… Defining a market… More “marvellous water views”… It’s not in the genes... Housing debate – more soon…

Why There’s Nothing Genetic About Housing

Of all the emails we receive into the Money Morning mailbox, the most enjoyable are the patronising ones.

Not surprisingly, a big chunk of them are from property spruikers… mostly telling your editor we don’t understand the property market, so why don’t we just “shut the heck up!”

That’s right, today we’re back to smack the property spruikers round the ears…

Words from a “credible” analyst

The funniest email we’ve gotten was from a “credible property market analyst and advisor”… that’s his own words.  Extracts of the email are below:

“Just been reading your (comical) writings on the housing bubble.

“There is no bubble!  There is no “one” property market!

“The property market across most (not all) of Australia has been flat for the last 12-18 months. Sure, there are some locations which have experienced (on paper) losses of 10-15% over a short period, but many locations have experienced between 0% and 8% growth over the last year. That’s hardly catastrophic.

“Show me when the Australian property market has ever crashed by more than 10% in any given year.  Show me when the ASX has declined by greater than 10% per annum.

“Property is a long-term asset class so looking at growth rates across small periods such as 3 months or even 18 months are somewhat irrelevant (especially if the investor has followed a scientific research process and selected a quality investment property with specific fundamentals).  Yes, ‘fundamentals’ – there are such things but DIY investors wouldn’t be aware of them.  Looking at the performance of an investment property over several years is more appropriate.

“Some of the comments you’ve made in respect to housing supply and demand are wrong. I’ve read the entire publication produced by the Federal Government’s Major Cities Unit.

“I could rant for ever as to why there is no ‘housing bubble’ but I’d be wasting my time because you are clearly pro-shares and like to beat up how good the sharemarket is by being (unreasonably) critical of the property market. That’s poor form and unprofessional. Rather than bag your “opposition”, try sticking to what your area of expertise is.  If property is so bad, why don’t you live in a tent or a caravan?

“I am a credible property market analyst and advisor. I aim to help people invest wisely in property. You prefer shares, I prefer property. I don’t cr@p on about the sharemarket dropping 4% in a few days because of a tsunami, or the last stock market crash, or that I know many people whos [sic] superannuation has declined by $100,000s over the last few years. It’s just poor form. The truth is, people can make good money from shares and property but there’s a lot more to know about each asset class…

“A final word on the property bubble. Michael Matusik has produced a good article which sums it up pretty well so I’ve attached it for you.  I’ll also add this:

• Australia’s banking practices are nothing like those in US and Europe where property markets are still struggling
• Residential property is an essential commodity (we all need to live somewhere)
• Modern science is allowing us to live longer and foreigners will continue to migrate to this great country because of our employment opportunities, culture, vast open spaces, and general quality of life
• History is proof that the nation just can’t build anywhere near enough properties to keep up with population growth
• Do you think that the cost of other essential commodities such as milk, bread, and medical services are likely to increase or decrease over time?
• Do you think that the wages of builders and associated skilled labour who build and renovate properties will increase or decrease over time?
• Do you think that the cost of raw land will increase or decrease over time?
• Do you think that the timber, cement, bricks, steel and other material which we use to build will increase or decrease over time?
• Do you think that Australian’s will suddenly quit their obsession with renovating their family home?

 “Stick to your knitting!”

Our dear old departed grandmother tried to teach us knitting once.  We never got the hang of it… we couldn’t understand the jargon… what did “pearl one” mean?  So we gave it up.

But back to property.  For someone who claims to be a “credible property analyst and advisor”, there’s a certain lack of credibility in the reasons for Australia not having a property bubble.

Fairy tales without facts

It’s just the same old excuses.  Making statements as though they are true – “we all need to live somewhere” – without considering the facts.

It’s true that we all need to live somewhere.  But that doesn’t mean house prices always go up.  We all need to eat.  But that doesn’t mean we can always afford to buy the same type of food.

If bananas are $20 a kilo, most people will stop buying bananas and buy another, cheaper fruit instead.

The same with housing.  When house prices are too high, people will stop buying.  But it doesn’t mean people become homeless.  It means they make alternative arrangements.  They’ll buy a smaller unit rather than a house, or they’ll rent a unit or house, or they’ll house share – yes, people still do that.

Or any number of alternatives.

But this doesn’t mean there’s a housing shortage.

As we’ve written before, spruikers often blather on about property being all about supply and demand.  They’ll then bang on about a chronic housing shortage – by the way, there is zero, I repeat, zero evidence to support a housing shortage.

And don’t tell me that’s rubbish, because it’s true.  There’s not a single jot of evidence to support the housing-shortage theory.

We’re expecting a big response to that claim.  But let me make something clear, quoting statistics and ratios dreamed up by a banking analyst won’t qualify as evidence.

What they tend to forget is supply and demand is also influenced by quantity and price.  What they also forget is the price can change without an increase or decrease in demand or supply.  So simply saying, “it’s all about supply and demand” misses the point.

But we do like it when the spruikers try to school us in markets,“There is no one property market in Australia” is the latest cry.  “The market is made up of lots of different markets.”  “It’s wrong to talk about ‘a’ property market.”

D’uh.

We know that, but they aren’t telling us anything new.  It’s the same as the stock market.  The stock market is made up of hundreds of different markets.  They’re called companies.

Defining a market

But it’s still valid to talk about “the stock market” or “a stock market”.  Simply because the valuation of one company can have an impact on the valuation of another seemingly unconnected business.

For instance, if resources stocks look overpriced, investors will ditch those stocks and look at other sectors, such as retailing or banking.  That could force resources stocks down and retail and banking stocks up.

But it’s also possible for investors to ditch all stocks if they believe the entire market is overpriced.  That can mean even fairly priced stocks are smacked down – we know that for a fact because in late 2008 and early 2009 we tipped stocks such as Retail Food Group [ASX: RFG] and Cash Converters [ASX: CCV] which were trading lower than where we believed they should be.

Property is no different.  If prices slump in Queensland it can have an impact on house prices in Melbourne.  How so?  Because investors or even owner occupiers may consider buying in Queensland rather than Melbourne.

So, as investors and owner occupiers move to invest in Queensland, it will have an impact on prices in Melbourne – would you still pay $400,000 for an apartment in Melbourne when you may be able to pick one up for $200,000 on the Gold Coast?

Who knows?  Some would, but some wouldn’t.

So, we’ll keep talking about the property market, if our “credible” analyst friend doesn’t mind.

We also like this idea that losses are only “paper” losses.  Really?  So when a property goes down in value and the mortgage payer is paying out thousands of dollars a year on interest, that’s a “paper” loss is it?  No, we thought not.

Besides, we’re already past the period where losses were on paper, losses are actual.  Just refer to the beachside Queensland properties I highlighted a couple of weeks ago… property prices have fallen by half in some areas of Queensland.  And it’s catching.

The market that was supposed to be immune from price falls – Melbourne – has seen median prices slump 6% in the past year.  Not only that, but the mainstream press is even highlighting the losses.

According to News Ltd:

“Melbourne home property prices drop $400 a week in two-year record plunge”

Now, let me ask you.  If you’re thinking of negatively gearing a property, and you read the value of the property will fall $400 per week, will you still buy that property?

Not when the only reason for negatively gearing a property is to benefit from capital growth.  If you’re losing out on the income andthe capital, only a nutter would still buy an investment property.

More “marvellous water views”

But back to Queensland.  Today’s Australian Financial Reviewreports:

“Despite bids on 30 of the 36 units, none was sold…

“An opening bid of $65,000 for an 88 square metre one-bedroom unit was the lowest offer made.  One of two 512sq m penthouses attracted a maximum bid of $600,000 after it was listed last year for $1.58 million.”

Oh, and by the way, the article is headlined, “Resort liquidation sales goes to water”.

In other words, this bricks-and-mortar investment was so spectacularly bad, the original vendors couldn’t flog any of the units, and it turns out the liquidators have fired blanks as well.

While we’re on the subject, Money Morning reader, Shane sent us a link to a property in Rainbow Bay on the Gold Coast.  The real estate agent blurts:

“Rainbow Bay Landmark Property Slashed by $400k!”

The property is now on the market for $1.399 million.  Interestingly, the property yields gross income of $46,000 per year.  Minus rates of $7,620, you’re looking at a yield of 2.7%... deduct interest expense and other costs, and… oh boy, what a crappy return for a market that’s not likely to see price appreciation for at least ten years!

That’s a whole lot of paper and real losses.

We know investing in shares isn’t perfect, but unless you use margin lending, at least you don’t keep forking out cash every month to keep your share investment.

And if you buy a good dividend-paying stock the investment will pay you… that’s probably a weird concept for a “credible” property analyst – an investment that pays you money, rather than one where you have to pay money each month in order to keep the bank from repossessing it.

We make no bones about it: buying property today is riskier than buying small-cap stocks on the stock market.  Do the numbers for yourself.  A massive mortgage with zero growth equals thousands of dollars lost each year.

But what about other points made by the “credible” property analyst.  Let’s quickly knock each one over…

“Australia’s banking practices are nothing like those in US and Europe where property markets are still struggling” – who says?  What about the secret loans from the US Fed?  What about the increase in bad loans on Bank of Queensland’s books?  What about the fact that Australia’s banks have more than half their loan books exposed to the Aussie housing market.

American and European banks were considered safe before everyone figured out they weren’t.

“Residential property is an essential commodity (we all need to live somewhere)” – as we’ve already pointed out, this is an irrelevant argument.  People adjust their lifestyles to suit the circumstances.  Next…

“Modern science is allowing us to live longer and foreigners will continue to migrate to this great country because of our employment opportunities, culture, vast open spaces, and general quality of life” – again irrelevant.  Japan has one of the longest life expectancies of any nation, and so do the Mediterranean countries… that didn’t stop property prices falling in those countries.

Besides, all the bluff and bluster about people migrating to Australia has ground to a halt.  The latest numbers show net migration has slumped from last year’s peak.

“History is proof that the nation just can’t build anywhere near enough properties to keep up with population growth” – where’s the proof?  That’s right, there is none.  In fact, the reality is the opposite.  History shows that the nation has built plenty of properties to keep up with population growth.

As we say, people adapt.  If someone can’t afford to buy a house they’ll seek alternatives.  That’s why you see a boom in high-rise developments and the subdivision of land.

“Do you think that the cost of other essential commodities such as milk, bread, and medical services are likely to increase or decrease over time?” – They will decrease once the inflation Ponzi scheme collapses in a heap.  But clearly our “credible” analyst hasn’t seen the news about the “milk wars”.

And as for medical services, these prices only rise thanks to immoral government intervention in the health industry that causes prices to rise.  Similar to housing, but neither are guaranteed to last forever – the government can’t possibly steal enough money from taxpayers to keep these Ponzi schemes going forever.

“Do you think that the wages of builders and associated skilled labour who build and renovate properties will increase or decrease over time?” – We don’t know, but neither does our “credible” analyst.  He can only guess.  What we do know is that there’s nothing set in stone to say the price of labour always has to increase.

At the moment, rising wages are just another function of Ponzi inflation and credit growth.  Neither are guaranteed to last forever.

“Do you think that the cost of raw land will increase or decrease over time?” – The same as above.  The situation in other countries shows prices of land can fall too.  Australia isn’t immune to this.

“Do you think that the timber, cement, bricks, steel and other material which we use to build will increase or decrease over time?”– Same as above… Ponzi inflation and credit.

“Do you think that Australian’s will suddenly quit their obsession with renovating their family home?” – Yes.  Why not?  All the nonsense about Australian’s having a genetic affinity with their homes, is just that – nonsense.

It’s not in the genes

It’s often said Australians have an affinity to property due to their European heritage.  Especially those from Italian and Greek backgrounds… just remind us of how the Greek and Italian economies and housing markets have fared?

But before we do, that was just too easy.  The property spruikers really should try harder.  But then again, it’s pretty hard to keep the myth going when there aren’t any real facts to back their case.

Back to the genetics of house prices.  According to The Economist:

Source: The Economist

So much for genetics.  According to this chart, the only bubble left to pop is the Australian house price bubble.

But as we know, the bubble has already popped.  You’ll see the data flow through to the statistics soon, and then it’ll only get worse.

And the housing shortage will be revealed for what it really is – a sham.

In fact, we’re guessing the popped bubble will be clear for all to see by the time your editor takes part in a housing debate in Sydney at the end of May or early June.

We can’t give you the full details yet, but when we can we’ll let you know.  It’ll be a perfect opportunity to confront a couple of housing bulls square on.

Until then, just sit back and wait for Australian houses to take an even bigger hit.  As we wrote a few months back, the end of 2011 or 2012 could be the time for opportunistic buyers to make low-ball offers to desperate sellers.

We don’t think that time has come yet, but it’s certainly worth keeping a close eye on the property market for bargain basement sales.

Cheers.

Kris SayceFor Money Morning Australia