house prices

It’s all happening here on Fitzroy Street.

With your editor writing two monthly research reports, two weekly updates for the reports, and a daily newsletter six days a week, plus all the research we have to put in for those newsletters, we thought it was about time an editorial/research assistant was hired.

Well, yesterday Shae started work and already we’ve been able to fob off a bunch of work.

Result!

But that wasn’t until she’d completed her first task – chair construction.

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Day three, and still nothing from the property spruikers apart from statements such as “of course increased population leads to higher house prices.” There’s no of course about it.

Gee whizz, if your editor used such flimsy arguments when tipping a stock in Australian Small Cap Investigator or Australian Wealth Gameplan we’d be locked up.

Seriously, the basic argument put down by the spruikers is this: chronic housing shortage equals rising prices, and massive population growth also equals rising house prices. Therefore property investors get rich.

In reality, if the housing shortage is that bad, and the population growth as high as they claim, we aren’t looking at a get rich quick scheme, we’re looking at slums and ghettoes as 35 million people squeeze into 7 million houses – not counting the holiday homes of course.

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One day on and still nothing from the property spruikers on the claimed relationship between population growth and house prices.

Not a sausage.

We expected to receive at least one piece of evidence to support their case. Instead we’ve received more information from Money Morning readers that supports the argument that population increases and house prices are not necessarily correlated.

As always, we’re happy to be proved wrong.

But onto something different for today. And it’s just a brief Money Morning as we’re on a tight schedule to complete a couple of reports for our paid subscribers.

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It’s been a while since we’ve given the property spruikers a few jabs in the ribs.

But yesterday the Money Morning mailbag bulged at the seams with emails concerning the speech given by Reserve Bank of Australia, head of Economic Analysis, Tony Richards.

Not surprisingly the mainstream press was straight onto it, with “House prices about to soar” headlines.

Although we do note this morning, the tone of the headlines has changed. The story is the same mind you, just the headlines are different.

This morning we have, “Reserve Bank warns on house prices” and “Soaring house prices not helping us.”

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