- Hockey’s proneness to mistakes matters well beyond issues around the housing bubble. It’s not just that he has been a serial creator of problems for the government. It’s also that this is a particularly challenging time for the economy, which requires a treasurer who’s seen both as competent and as in touch with ordinary people’s situations.
That excellent quote came from Michelle Grattan. She says of Hockey:
- Hockey is not nuanced or subtle, and often he’s not careful. His detractors have for years nicknamed him sloppy Joe.
The fuss was over Joe Hockey’s contribution to the expensiveness of the Sydney housing market.
“The starting point for a first home buyer is to get a good job that pays good money,” he said.
“Then you can go to the bank and you can borrow money.”
The same article says:
- The median price in many suburbs of Sydney that are even vaguely close to the city has exceeded $1 million, surging more than 12 per cent last year.
Problem is that couples with two ‘good’ jobs, such as teachers, nurses or childcare workers, are finding it difficult to get into the market.
Hockey was presumably responding to comments by Treasury secretary John Fraser and by Greg Medcraft, the chairman of the Australian Securities and Investments Commission (ASIC) about the Sydney housing bubble.
At that stage Reserve Bank assistant governor Malcolm Edey did not use the B-word but spoke about the situation being “risky” and “over-heated”.
Reserve Bank Governor Glenn Stevens didn’t use the B-word either, he just told a business lunch that parts of the Sydney housing market were “crazy.”
Hockey had plenty of time to think about the issue. However, ABC online business reporter, Michael Janda, is even more worried about Hockey’s follow-up remarks. When you are in a hole, stop digging. For example:
- Hockey’s throwaway remark that “if housing were unaffordable in Sydney, no one would be buying it” makes superficial logical sense, but entirely misses the point economically and socially.
It’s investors rather than home owners that are increasingly purchasing.
Hockey says we don’t want prices to fall, we need more supply. But, Janda says, more supply will bring prices down.
This somewhat undercuts Tony Abbott’s assurances that with Joe the economy is in safe hands.
Hockey can take comfort in that he has Mark Latham’s support who slamed the ‘outrage industry’ led by the left-wing media. Then he came up with this bizarre comment:
“But essentially, the leftist technique in politics is social engineering, trying to control everything and build a society in their image.
“And anyone who speaks out, or is inclined to disagree with that, is condemned.”
What exactly does that have to do with Sydney house prices?
With friends like that…
Update: The AFR today goes into the housing markets and affordability.
In Sydney the median price is $752,000 and you will need a salary of $151,680. Two nurses or preschool teachers won’t cut it, you need to be a CEO, an IT manager or a psychiatrist or similar.
For Melbourne the median is $569,500 and you will need $114,480. For Brisbane the figures are $463,000 and $93,400. Canberra and Perth fall between Melbourne and Brisbane.
The cheapest mainline capital is Adelaide where the figures are $400,000 and $80,720. They didn’t do Hobart.
Update 2: See also John Davidson’s post What is stopping low cost housing?
Update 3: See also at The Conversation: