The accompanying flyer provides the real election leaflet for Hindmarsh Ward this year.
Candidates may proclaim this or that policy, but it is the property boom that is relentlessly reshaping Hindmarsh, and therefore setting the tasks facing the incoming Council.
Some observers say that Australian housing prices are 40% over value – and while prices are now trending down interstate, here in South Australia some “hot-spot” suburbs have recorded percentage rises of double digit levels for 2009-10.
This is a result of capital movements which bear no relationship to the historical norm – bank mortgage finance at 5% - 6%pa. The present asset price bubble is fuelled by speculative capital flows from overseas sources, short term investments by superannuation funds in property trusts, and small scale individual speculation by local property owners. Characteristically, the bubble is justified by a pernicious circular logic in which asset price rises are assumed to constitute an adequate – or even necessary - basis for further rises.
The following chart is drawn from ABS tables. It clearly demonstrates the result of the late eighties asset price bubble on housing construction in South Australia– that investment is in effect “brought forward” by such booms, and this brought forward investment is at the expense of future investment levels
Housing costs now however are now at a high of six to seven times annual household income. The “Australian dream” is now only possible for a majority of Australians if wage income is supplemented with returns from credit based property speculation, whether real or as “on paper” profits. In the area this reliance is displayed by the churn factor, as one half of residents of the Federal electorate have been residing in the same house for less than 5 years.
“BUILDING WEALTH”..DRAWING IN FRESH LAYERS OF
At the urging of the Property Council, major development consortia, and the monopoly media both the Charles Sturt Council and the State Government have been tireless in facilitating the bubble. The Council plans to change zone provisions throughout the ward, with the intention of relaxing impediments to property development. The State Government is about to launch high density growth centres at Bowden and further “Transport Oriented Developments” along the Port Adelaide railway line. As the local MP Mick Atkinson points out, the majority of units in the Bowden TOD will be affordable by the upper income bracket latte set only
indicative plan from Charles Sturt CEO Mark Withers showing TOD extent (blue circles)While there are compelling reasons for increasing densities in the area, to implement this riding on a wave of speculative frenzy is imprudent. Council could turn its attention to providing affordable rental housing as is the case in the UK – if the electors so decide.
