Saturday, December 08, 2007

Mortgages, rents and elections

Now the new Australian government is bedding in the Howard post postmortems are dominating news background stories. How was such a well entrenched conservative government rolled so comprehensively?

With the US elections looming, and many of the dynamics so well aligned, the recent poll here could shed some light on how and why things will play out in 2008. I still claim that economics, household economics, is the best indicator.

The rational for Howard’s defeat is being place variously on:

I guess each of these elements might find resonance in the US, but I’m inclined to stick with the household economic argument. Not that I agree totally with many of the commentators. For example:

“VOTERS in electorates recording the highest rates of home repossessions voted more strongly for Labor than areas not facing the same home-loan pressures, according to figures on the influence mortgage stress had on the federal election result.” Fear of losing homes drove Labor win

This view is focused and simplistic. It is focussed on a number of Sydney metropolitan electorates and as my favourite psephologist Antony Green notes:

“…the seats identified did not appear to select the seats with the lowest incomes, but rather those facing the highest cost-of-living expenses,” Which doesn’t make the finding false, just misleading.

The fact is, in those particular electorates the swing to Labor was far higher than in other electorates across the state. But a contained swing doesn’t translate into a broad sweep of wins. That focus failed to recognise another dynamic, equally housing related, and the one that delivered the additional seats Rudd required.

I'm inclined to call it something like 'domestic security stress'.

The growing regional centres have their own mortgage, plus rental stress. In many of these regional centres housing availability is well below demand. Whether mortgage or rental, pressure is on to churn occupiers.

Regulars might recall the eviction notice we received here at campaign central, early in the campaign for Lyne. So I’m paranoid and at the time saw a correlation. While the effort at intimidation continues (the legal approach failed) I find myself helping other people who are being put under pressure to vacate their properties.

The fact is, with a shortage of housing stock, agents can benefit handsomely by turning over property occupancy. Rents particularly will soar and prices will no doubt rise as a consequence. Rudd would not have taken regional seats without this housing pressure.

And in the middle of all this George W Bush wants to save the sorry arses of property speculators. I guess this is where I show my left credentials, such as they are. But more, I am pointing out that you screw people’s ability to have some sort of domestic security at your political peril.

Our economies are being raped in the name of corporate greed. We should expect our governments to restrain the sort of excesses that see families forced out of homes. The sub-prime fiasco used greed to feed greed, and should have been monitored. Don’t bail out the speculators, bail out the victims.


abi said...

housing availability is well below demand

Send some of those buyers to the states. We have the opposite problem around my way, and we can't ship you the houses.

- abi

Cartledge said...

abi, I'm not sure the buyers are there in any great numbers, beyond realtor's dreams. The demand is there for accommodation, mainly rental at the moment. I guess the investment buyers will keep buying and there are signs of buyers going over the odds in the metro areas, but it is a confused market at the moment.