Where can I get one of those magic shovels?

Social Housing Minister Witterings alerted me to a nice bit of Home-Owner-Ist propaganda entitled We need house prices to go up over at ConHome. The author got a fair old kicking in the comments, and I posted it at HPC just for a giggle, where the kicking continued unabated.

To my surprise, the author really is the gift that keeps on digging. He posted the following response at HPC:

David T Breaker said...

Thanks for the link to my post and feedback. Always welcome. I would however like to make a few points which you seem to have missed;

1. I recognise house prices are above the "historic norm" of 5x average earnings; my argument is that this "norm" no longer applies due to the fall in other prices, which means more income is available for housing costs, and the rising population.

2. I recognise first time buyers would like lower prices; my argument is that the large deposits are the problem however, and these are caused by banks fearful of falling prices. When prices start to rise again the deposit requirement will drop.

3. Falling prices doesn't increase supply.

4. We do not want to build on our countryside!

To which I responded thusly:

1. This is Ricardo's Law of Rent all over again. [He acknowledges that] if the economy becomes more efficient, this does not primarily benefit workers or businesses [or even consumers], it merely serves to drive up house prices. So why bother working? You can make more money by buying land and watching it appreciate.

2. So no more "no more boom and bust" then, just more "boom" for ever? When house prices were low and stable (for a few brief years in mid-1990s or indeed in the 1950s and 1960s) there was no problem getting a decent 20% deposit together for FTBs, was there?

3. Falling prices will increase the supply of affordable housing. That's all FTB's are asking for. Or have I missed something? For sure, falling prices are bad for the economy, but trying to keep the bubble inflated is worse. The best thing we could do is a nice big crash, let 'em fall and then keep them low in future.

4. OK, either we want to increase supply (in which case he contradicts his own point 3, which suggests that an increase in supply is A Good Thing), or we want to prevent all new construction (which is A Good Thing if you are a Greenie or NIMBY). In any event, where on earth does he think that existing housing was built? Great Britain was once all forests, you know.