The Devastating Economic News About Rising/Falling/Stagnant House Prices…

Rossleigh

1 year ago

From time to time I like to remind people of the wonderful poem, “Said Hanrahan” which I’ve included at the bottom for those who don’t know it. But basically, Hanrahan announces how “we’ll all be rooned” any day now.

While it’s basically about the trials of the farmer, it has a certain modern appeal for anyone listening to anything that any economist predicts after they’ve spent an hour or so gazing at the latest statistics.

The stock market on the other hand, is a different beast from your average economist, and rather than rely on the cold hard statistics or the cold, squishy entrails of a chicken, the share market is rather more emotional. That’s not to say that everyone playing the share market is irrational; some of them are just trying to make money out of someone else’s irrationality.

In the simplest terms possible let me declare: THERE IS NO SUCH THING AS ECONOMIC GOOD NEWS!

Now, I know that many people will dispute this but it helps to remember that economics is like the AFL premiership. Some people will be happy if one team wins, but most supporters of the other teams will be disappointed. And, let’s be clear here, most of the rest of the world will be unaffected and not care, but simply wonder what all the fuss is about.

So it is with economics. We can interview an Australian economist who tells us how terrible it is that house prices are slipping, even though last year, the interview was with someone who thought that it was terrible that house prices were rising because it either a) created a bubble which would eventually lead to tears, or b) keep first home buyers out of the market. Whichever way it goes, someone will be cheering, but, unlike sports commentary which tends to focus on the winners, most of the economic focus will be about who’s likely to lose badly.

I couldn’t help but wonder why the media keeps focusing on vested interests without stopping to point out that they are only interviewing these folk in the hope that they’ll give us some greater insight than – to paraphrase – “We don’t think we should be the ones to suffer, so please consider us and ignore the losers because they’ve always been losers and we’re not, so don’t change it so that we have to give up some of our booty because it’s really not that much in the scheme of things and if a few thousand need to go hungry or homeless or both it’s a small price to pay to ensure that nothing upsets those who’ve sacrificed lots to make sure that they’ll one day have a shitload of money…”

I always notice the little tricks with statistics at such times and the emotive plea to help those “mums and dads” who are never “dads and mums” or even “aunts and uncles”. And they’re certainly never “stepdads and mistresses”.

No, it seems that most landlords only own one property and the handful who own upwards of fifty properties each can be ignored, even though it works out that the ones who own more than one sometimes own lots more than one, so it does work out that even though there are more of the poverty-stricken mum&dad single owners than multiple rental property owners, the latter group still own most of the rental properties…

But leaving aside statistical tricks, I heard one amazing thing from an interview today. I joined late, so I can’t name the man who said this but he was asserting that some of these mums and dads who’ve only bought a property to finance their retirement (not for the tax advantage of negative gearing so I guess they haven’t bothered to claim anything there!!), will be forced to sell thanks to Dan Andrews proposed “rent freeze”. This will be awful, not just for them but it won’t help in any way because – and you may need to think about this – they won’t be bought by renters or investors!!!

Now, I would have expected that if there were a flood of properties on the market that at least some of them would be purchased by non-struggling investors, keen to add to their portfolios at bargain prices given – as the interviewee suggested – Andrews freeze would drive up rents.

But if they were driving down house prices, I would have also thought that some people saving to buy a house would be renters and that when they bought a place then that would be at least one or two out of the rental market.

However, no. Neither a renter nor an investor will be those who are buying these properties from the mums and dads and uncles and aunts or anyone with a grandfathered investment. Verily I ask, who shall these buyers be that are neither an investor nor a renter? Just some average home owner who wants to expand next door?

It’s a mystery.

Anyway, as I said at the start the conclusion of any economic news is that we’ll all be rooned any day now. To quote Hanrahan directly:

SAID HANRAHAN

“We’ll all be rooned,” said Hanrahan,

In accents most forlorn,

Outside the church, ere Mass began,

One frosty Sunday morn.

The congregation stood about,

Coat-collars to the ears,

And talked of stock, and crops, and drought,

As it had done for years.

“It’s lookin’ crook,” said Daniel Croke;

“Bedad, it’s cruke, me lad,

For never since the banks went broke

Has seasons been so bad.”

“It’s dry, all right,” said young O’Neil,

With which astute remark

He squatted down upon his heel

And chewed a piece of bark.

And so around the chorus ran

“It’s keepin’ dry, no doubt.”

“We’ll all be rooned,” said Hanrahan,

“Before the year is out.

“The crops are done; ye’ll have your work

To save one bag of grain;

From here way out to Back-o’-Bourke

They’re singin’ out for rain.

“They’re singin’ out for rain,” he said,

“And all the tanks are dry.”

The congregation scratched its head,

And gazed around the sky.

“There won’t be grass, in any case,

Enough to feed an ass;

There’s not a blade on Casey’s place

As I came down to Mass.”

“If rain don’t come this month,” said Dan,

And cleared his throat to speak–

“We’ll all be rooned,” said Hanrahan,

“If rain don’t come this week.”

A heavy silence seemed to steal

On all at this remark;

And each man squatted on his heel,

And chewed a piece of bark.

“We want a inch of rain, we do,”

O’Neil observed at last;

But Croke “maintained” we wanted two

To put the danger past.

“If we don’t get three inches, man,

Or four to break this drought,

We’ll all be rooned,” said Hanrahan,

“Before the year is out.”

In God’s good time down came the rain;

And all the afternoon

On iron roof and window-pane

It drummed a homely tune.

And through the night it pattered still,

And lightsome, gladsome elves

On dripping spout and window-sill

Kept talking to themselves.

It pelted, pelted all day long,

A-singing at its work,

Till every heart took up the song

Way out to Back-o’Bourke.

And every creek a banker ran,

And dams filled overtop;

“We’ll all be rooned,” said Hanrahan,

“If this rain doesn’t stop.”

And stop it did, in God’s good time;

And spring came in to fold

A mantle o’er the hills sublime

Of green and pink and gold.

And days went by on dancing feet,

With harvest-hopes immense,

And laughing eyes beheld the wheat

Nid-nodding o’er the fence.

And, oh, the smiles on every face,

As happy lad and lass

Through grass knee-deep on Casey’s place

Went riding down to Mass.

While round the church in clothes genteel

Discoursed the men of mark,

And each man squatted on his heel,

And chewed his piece of bark.

“There’ll be bush-fires for sure, me man,

There will, without a doubt;

We’ll all be rooned,” said Hanrahan,

“Before the year is out.”

John O’Brien