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Stanhope rejects any influence on interest rates

By Jazz - 7 August 2007 28

After reading the last submission i found it hillarious to come accross this article in posted on ABC Online yesterday where Hopeless Stan rejected claims that the ACT had some influence on housing interest rates.

Nothing at all to do with spiralling housing costs. Or the mass land sales in order to get his budget in surplus.

I also found it amusing that he’s having a go at Howard and Co. for not keeping election promises from 4 years ago that interest rates would never go up. hello… pot calling kettle…

Stanhope is not alone though, as seems all the state Labor leaders are jumping on the same bandwagon

What’s Your opinion?

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28 Responses to
Stanhope rejects any influence on interest rates
boomacat 12:15 pm 07 Aug 07

If I was a builder I would take advantage of the tight market and charge high prices too, it’s all part of the capitalist free market.

Snahons_scv6_berlina 12:11 pm 07 Aug 07

VY already pointed out one of the significant issues. Even if they release large parcels of land at “cheap” prices. There isn’t enough builders around. As a result you may get what seems a reasonably cheap block but the builder will slug you exhorbitant price for construction because:
1. He doesn’t care, he’s already got more work than he can handle.
2. He can jack his prices up so the total cost of ownership to the home owner is relative comparable to what the existing market rates are.

There’s only one way house prices generally ever fall – interest rates in double digits. Until then you’ll get stung somehow (land cost or construction cost).

boomacat 11:47 am 07 Aug 07

Jazz governments don’t increase interest rates, the Reserve Bank does, which is totally independent of government.

Howard promised everyone that he was in control of interest rates and could “keep them low” at the last election. Since then interest rates have gone up 4 (maybe 5) times. Now Howard tells us it’s actually the States who control interest rates.

Sorry mate, you can’t have it both ways. Sounds like another Howard lie to me.

Your idea that releasing large parcels of land (increasing supply) has increased price seems totally contrary to economic principles.

And I’m sure that every homeowner in the ACT would be really impressed if Stanhope dumped a load of land onto the market at artificially low prices, thus slashing the value of their own homes and, for many Canberrans, putting them in negative equity (ie they owe the bank more than the value of their house).

only he could “keep interest rates low” during the last election campaign. against the ALP to hoodwink voters at the last election, whom he then later betrayed by introducing WorkChoices.

Jazz 11:37 am 07 Aug 07

and with more money comes more inflation and eventually changes in interest rates. For stanhope to say that the economy in canberra is having NO effect on bank interest rates is complete bollocks.

VYBerlinaV8 now_with 11:33 am 07 Aug 07

There are a number of factors, but people having more money to spend is definitely one of them.

pierce 11:25 am 07 Aug 07

Didn’t Johnny tell us the other week that high house prices were just a side-effect of our national prosperity?

flyingblind 10:36 am 07 Aug 07

It already has for our office Ralph, none our our interstate Branch’s would touch Canberra with a barge pole because of the huge cots involved.

I work for a private company so i dont blame the others not coming down here as there are no financial incentives to do so.

Ralph 10:03 am 07 Aug 07

Good swathes of Sydney are now cheaper than Canberra.

Will start impacting on employment here not before long.

VYBerlinaV8 now_with 9:53 am 07 Aug 07

One of the new blocks down by the Cotter Road recently sold for $460k. Good to see the ACT govt isn’t gouging.

Thumper 9:47 am 07 Aug 07

Admittedly, Molonglo is soon to opened up, as is West Macgregor.

yet these tracts of land, especially West Macgregor, could have been opened up years ago.

VYBerlinaV8 now_with 9:39 am 07 Aug 07

Land release is one of the major factors keeping housing prices in the ACT up. There is not enough pricing disparity between inner and outer areas which has two effects:
1) People still flock to the inner areas because the percentage difference is not that large; and
2) Local govco is sorely tempted to release land slowly to maintain the price, rather than releasing enough land to meet demand, which would settle the market considerably.

Problem is, we don’t really have enough builders around the place, so savings in land price can easily get gobbled up by increases in building costs.

LG 9:25 am 07 Aug 07

Woody Mann-Caruso – its about ‘how’ they release. in dribs and drabs to get the highest price for the land (and greater stamp duty)

Jazz 9:24 am 07 Aug 07

i didnt mention increasing land supply. i said increasing cost of housing.

Inflation is the increase in cost of something over time.

In order to combat inflation govt’s increase interest rates.

andy 9:18 am 07 Aug 07

of course teh states are blaming the Feds.
It’s political blame shifting, and it’s cause the Feds are blaming the states.

Woody Mann-Caruso 9:16 am 07 Aug 07

Nothing at all to do with spiralling housing costs. Or the mass land sales in order to get his budget in surplus.

I’m slow. Could you explain to me how increasing the supply of land drives housing prices up?

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