Property supply magic

But one can drive through any decade-old estates like Caroline Springs and still see vacant lot after vacant lot. They sit there innocently on most streets as battlers drive past them in a mad rush to get to work.

Some say the Australian housing bubble is different because China is hand delivering billions in export earnings. Some of the highest returns for property investors have been in mining towns, forcing locals out and ensuring that mine workers pay upwards of $2000 per room per month.

Nobody is spared the power of the landlord to extract their pound of flesh.

In 2007 Prosper started evaluating genuine housing vacancy rates. By 2008 we were analysing land usage via water consumption figures for 6 monthly periods. At the time the public was told that there was a 0.9% vacancy rate in the Melbourne CBD. This widely quoted figure compares advertised rental property to total housing stock.

Our I Want to Live Here report found a 7 per cent genuine vacancy rate (2008) by including speculative vacancies. With possible rental returns at $17,000 but capital gains jumping $100,000 in some years, there was little motivation to put a recently renovated property on the market to risky renters.

A similar study by the State Grid Corporation of China surveyed 660 cities, finding more than 65.4 million residences had electricity readings of zero over the past six consecutive months.

One suspects that our China based mining boom has shaky foundations. Our iron ore is being plundered to build Chinese apartments whose prime purpose is for speculative Ponzi trades.

Lloyd's Bank, bailed out after the 2008 Global Financial Crisis, has recently inspired 5 British local councils to offer £70,000 handouts to new property buyers (a la the First Home Owner Grants). As has been widely observed, if everyone gets £70,000 then the price of land goes up at least £70,000 - in effect a sellers subsidy.

Does anyone care about those young people who take the bait and sign up to a 25 year mortgage at just the moment land prices are turning? Have our business leaders, those for whom the public so trusted with massive bailout packages in the north, learnt anything? Has our government done anything to curb the same behaviour that destroyed so many lives in Europe and America?

Economics is barely taught at the secondary level. For many it is too confusing to understand. That is exactly the plan. Young people need to be warned about the market forces that have commandeered their life's investment, the land upon which their house stands.

Up to 500,000 people protested in London (26/3) over the cuts to public services imposed by the Cameron government. Many were incited to protest when a report from www.thisismoney.co.uk/havens came to light showing the widespread use of tax havens.

BHP uses 24 tax havens, Rio Tinto 18 and Xtrata seven tax havens. These were just some of the many to dodge paying their fair share of the tax burden. The euphemism used by the tax industry is 'asset protection'.