Bubble Economics: Australian Land Speculation 1830 – 2013

Paul D. Egan and Philip Soos has just had their new book published – Bubble Economics: Australian Land Speculation 1830 – 2013. It is available for download from the World Economics Association.

Egan and Soos looks back over Australia’s three Depressions showing how land bubbles attributed predominately to their creation and subsequent demise. They then explore Australia’s current unprecedented land bubble.

No doubt this book will be of infinite interest to many who frequent here.

» Bubble Economics: Australian Land Speculation 1830 – 2013 (6.4MB) – World Economics Association.


  1. This book reads like a thick thesis. Glad to see serious research is undergoing at the moment to support the claim that land price will be worst hit in Australia.

    Systematically the government is zoning the land, banking the land, ripping people off through land price and duties.

    For such a huge country with tiny population of 21 million people and 9 million private residential properties plus the many government-owned affordable housing, the saying that OZ is different and there is not enough supply… (all bullshit). Land policy undoubtedly contributes to the high property prices, where only government has control of land policy and even land itself.

    90% fall in land price as predicated?

  2. @millimouse
    I would have to agree!
    Australia avoided the GFC through China’s stimulus but it is still continuing, I honestly cannot see how this can be avoided, only delayed.
    Australian income is drying up!

  3. 1966 Sydney house prices $10,000 average. Average income $2,500/year. 1978 house price $50,000. Average income $25,000/year. 2014 house price $1,500,000. Average income $40,000/year. The numbers don’t lie.

  4. How ignorant some of you are. The Chinese are buying up all the new release property in Australia. Like hello – the Australian developers now only advertise directly in China.

    Yes we struggle with our population of just 21 million when compared to China’s 1,390,510,630 or otherwise 19.3 per cent of the global population. So whad – d – ya know they now want to get out of China and move their families to Australia.

    Property prices won’t be falling – unless the government tightens the rules they will be going through the roof.

  5. @6 …and you’ll be smiling all the way to the bank right? I know you’re just doing your job, but the whole point is that if people can’t afford to live anywhere either because of ‘through the roof’ house prices or painfully high rents, society breaks down at its core. Community disintegrates and crime soars. It is fundamentally inhuman that housing is as expensive as it is. As real-estate agents, you lot should be part of the solution, not part of the problem. Government will tighten the rules – it’s inevitable – otherwise there will be blood in the streets!

    And being called ignorant by a real-estate agent is the funniest thing I’ve heard all day!

  6. Unfortunately Rupert, the Mosman Agent is correct. Unless we have some one to vote for who will change the Housing-Political complex I’m afraid that the ponzi will just keep on going.

    No one cares enough to form a poltical party to do something about it.

  7. Mosman Agent,

    The 1.3b Chinese on average has RMB2,000(AUS370) per head. How many of them could afford to buy in OZ?

    The rich Chinese won’t bother to buy in OZ at all. They have better deals in US, EU, SK, JP, etc., because they are not stupid.

    What type of rich Chins bother to invest in OZ? According to academic studies, they are the corrupted officials and their family members who prefer OZ better than other places. The reason being surprisingly simple, OZ doesn’t have an efficient legal system. So far none of thm has ever been deported by OZ back to China.

    They are right that FIRB does not function at all.

    Xi and Li are cracking down corruption now. The corrupted tend to laundery more dirty money through OZ. But Chinese government is not stupid either…

    Anyway, Chinese investors are not steady source of funding to boost OZ property further. Even with the RE agents’ playing the game, Chins are not the last straw for OZ property bubble.

  8. mosman aka mosman park ? you sound like you are worried sir, without a constant flow of new buyers your career in selling houses will be long over.

  9. when compared to China’s 1,390,510,630 or otherwise 19.3 per cent of the global population


    Yet China remains a developing country (its per capita income is still a fraction of that in advanced countries) and its market reforms are incomplete. Official data shows that about 98.99 million people still lived below the national poverty line of RMB 2,300 per year at the end of 2012. With the second largest number of poor in the world after India, poverty reduction remains a fundamental challenge.

    So just stating that China has 1.3 billion people doesn’t really say much.

    When people get sick of the conjestion and lack of infrastructure and falling standard of living the doors will be firmly slammed shut. You only have to look at the asylum seeker debate to forsee this happening in the not too distant future. Any political party that stands in the way will be decimated.

  10. I fail to see how Chinese investors will support house prices if a severe recession hits in OZ.
    Maybe initially, but Australia’s has priced itself so badly out of the world economy that any investor would have rocks in their heads to not invest elsewhere in the world.
    As unemployment builds discontent will rise as will a nationalistic sentiment.
    I have no doubt in a couple of years we will be in recession and it will only be disguised by how much the population Ponzi masks the real extent.

  11. The simple fact that only the real estate agents are aware at just how much Australian real estate is being bought will astound most. So much so that I broke the story that the government would be holding an inquiry (currently running). There are so many loopholes on how foreigners can buy real estate in Australia – its become an absolute joke.

    Even those granted study visas on the basis that the property is sold once the studies have concluded doesn’t happen. The federal governments turn a blind eye simply because they know the state governments are happy to collect the Stamp Duty.

    The most recent FIRB figures show overseas purchases acquired 5,091 established homes worth $5.4 billion – should the government decide to investigate they will find that the figure NOT – FIRB approved would be around the $25 billion +.

    For the record I am against this – it should be stopped immediately.

  12. @13 MosmanAgent

    By that logic, if I was the government and wanted to increase my stamp duty receipts, I would absolutely hammer those overseas buyers who bend the rules. After all, force them to sell into the market and presto – another stamp duty collected! Correct me if I am wrong, but isn’t stamp duty charged on every sale? So increase the number of sales, not necessarily the price, and quantity becomes quality.

  13. The real estate guy reckons prices will go through the roof once the Chinese all move their families over here. Well, what would one expect from those with a vested interest in rising prices.
    I’m up on the north coast NSW. I go into commercial precincts and there are whole (that’s all of them) developments and shopping centers unoccupied, and the lease signs have been up for up to three years.

    Something horribly wrong here.

    We have a government in denial (Labor too), and reserve bank cornered with nowhere to go, dammed if they do, damned if they don’t.

    The Mosman agent is right, the prices have been and are going through the roof. Not for long. History tells us gross market distortions, which is what this bubble is, always revert to mean. Real estate guys don’t get it, too busy sliding their tongues up and down fat rolls of $100 dollar bills, and when they get on their computer they can only see seven keys – B-U-L-S-H-I-T.

  14. @ Ronaldo.

    Yep, there have been ghost suburb videos on you-tube for a while now.

    Markets don’t revert to mean: They overshoot!

    Especially when coupled with massive leverage: Here in SA we still get bombarded by adverts about 3% down or even 0% to purchase homes.

    Oh….Anyone got friends who bought new cars on low interest….are they aware what a balloon payment is? Car loans are the new sub-prime.

    I bet an Iced-coffee that there will be a huge segment of the market that needs to take out loans to pay balloon repayments on 3/4/5year old cars that are valued less than the repayment.

    A fool and their money are easily parted…..some things never change.

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