Mission Impossibubble: Taming the Australian housing (thought) bubble

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The housing market lockout is a real worry, but it's the Government's absurd, thought bubble response that has Jim Pembroke's ears popping.

BUBBLES, bubbles everywhere...

There are water bubbles, air bubbles and champagne bubbles. We can have an asset bubble, a credit bubble or a dot com bubble. The Dutch even had a tulip bubble. It won't surprise anyone to learn that all bubbles, whatever their origin, have similar characteristics. Understanding the physics of bubble science can help to make sense of pretty much any simple bubble analogy.

But when we have a potential housing bubble and a boy in a bubble – Prime Minister Malcolm Turnbull addressing the issue with a series of thought bubbles – the subsequent "bullshitery" can stretch any scientific understanding and challenge the very nature of reality itself. It is literally "unbelievabubble".

Where did this all start? The beginnings of the housing/thought bubble anomaly is lost in the annals of comic book history but one, “Did I really say that out loud?” moment does stand out.

Who can forget dumped Liberal treasurer Joe Hockey's shout out to struggling first home buyers – “Get a better job” – and his not so insightful analysis of an overheated housing market:

"If housing were unaffordable in Sydney, no-one would be buying it."

There you have it. A couple of a ill-considered thought bubbles buffeted by the stormy outrage of public opinion, nudging a poll that collapses on Joe Hockey's tax payer funded Canberra house.

Chaos theory does allow that the popping of a bubble in one location can cause the implosion of a political career in another. But we shouldn't only focus on the science of bubbles. Bubbles are also fun things. Who hasn't laughed at You Tube videos of playful babies going nuts over a bubble making machine?

Malcolm Turnbull can certainly see the funny side of the housing crisis and he's got the thought bubbles to prove it.

Last year, he joked with ABC radio host Jon Faine telling the jock to put his hand in his pocket and buy a house for his kid if he can't get into the market. Because all parents can afford to buy houses for their children, right ? A few weeks before this radio induced thought bubble, the PM praised some young parents who bought a rental property for their one-year-old toddler. Baby landlords, chasing housing bubbles. How cute! Let's hope that doesn't go viral.

Malcolm Turnbull's thought bubbles are meant to be short lived, sparkling globules that dazzle with reflected shimmer and colours. But, like soap bubbles, they are essentially empty. Furthermore, the Government is trapped in it's own ideological bubble — a thin sphere of delusion where they believe free market forces will solve the housing problem. Their preferred strategy is to immerse themselves in a conservative think tank and hope a housing solution spontaneously bubbles to the surface. Never mind that the market is distorted by negative gearing. Apparently,  a robust, free enterprise system is designed to encourage and reward investors who lose money. Unproductive, highly geared, property investments — what could possibly go wrong?

But the unsolicited real estate advice keeps coming. Deputy Prime Minister Barnaby Joyce burst the bubble of many home buyers with his idea that seemed to imply the government had given up on affordable housing in our cities.  He suggested  house hunters surrender any hope of owning a home in Sydney and move to cheaper accomodation in the bush - cue stunned silence and the occasional chirping cricket.

None of the governments thought bubbles survive long enough to become a brainwave. Consider the latest glistening globoid the Coalition has floated our way. The suggestion that first home buyers be allowed to cash in some of their superannuation savings to buy a home. Protected by their own   ideological orb, this sounds like a great idea to Turnbull's conservatives. They've never embraced compulsory superannuation and think people should be free to do what they like with their money. The fact that this will inflate house prices further and lead to pension stress in later years is a secondary consideration.

The Government knows that housing affordability is starting to bite in the electorate. So, why do their politicians respond with more ill-conceived, random thoughts?  

Maybe because they don't want to acknowledge the elephant in the room. Wages are stagnating and the cost of housing is out of control. Prices need to come down. Something must be done to address the demand side of the housing market — think negative gearing and capital gains tax concessions.

If the housing crisis is a monster bubble, the Prime Minister should ... stop feeding the beast!

There is some hope on the horizon with Treasurer Scott Morrison planning a housing package in the upcoming May federal budget. Perhaps the Government will consider restricting capital gains tax discounts for investors. However, if past form is anything to go by, it's likely to be a raft of thought bubbles. Let's call it thought bubble wrap.

But more than that, with housing affordability touted as a “centrepiece of the budget”, we might be looking at a mass of big bubbles surrounded by a whole lot of tiny bubbles.

Not so much isolated thought bubbles, more a political beat up of froth and foam.

Read more from Jim Pembroke on his blog jimselbow.wordpress.com or follow him on Twitter @Jim_Pembroke.

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