A careful reading of homer Hoyts '100 Years of Land Values in Chicago'
showed that at the end of every real estate cycle in Chicago that Hoyt
documented up to 1932, the buying of raw land went over the top in the
last years of the cycle and in fact marked the very peak of each cycle.
In 2006 the rush is on:
The Land Rush - PDF
Headline, Wall Street Journal page B1, July 22, 2006.
Scientific data it is not, the data in fact is just not assembled at any
level I can get to in the US. At least not yet anyway. Interesting
headline nevertheless. (full article not scanned here)
Recall the email on UK affordable plots being extensively marketed in
Singapore. Stands to reason of course. The higher land price goes, the
further out one has to go to find a piece that is affordable, hence this
will occur towards the end of a cycle.
So we are seeing:
- the NSW government set to 'fast track' planning legislation to bring
more raw land to market,
- the Qld government promising even more hand-outs to first home buyers
should it be re-elected, plus reduced stamp duty. (Hope you know that
this will kick straight into land prices, sending them higher and be of
no use whatsoever to buyers.)
- yet another market scheme to allow more buyers to get into the market,
this time from PodProperty, a scheme allowing people to group together
to collectively buy a house or investment property, with PodProperty
drawing up all the legals for you. (Already happening in the US,
notably San Fran.)
and then from an opposition ever keen to get off the back benches:
"urban sprawl as the necessary cost of affordable housing" is just utter
crap. Hope you can see through all this, its just the play of the cycle
- all to do with the annual rental value capitalizing into price. The
pressure is mounting now.
This is how as I said in prior classes it would happen, is it not ? So
far so good. The last years of the cycle are upon us in my view.