Sociological Effects Of Housing Bubble
In the never ending debate about the existence of a housing bubble, what is often ignored are the consequences to our lives. So perhaps because Peter Saunders believes that in Australia "the house price bubble has finally burst", he is looking at what the boom has wrought.
"When passive ownership of a house delivers riches far beyond what most people could accumulate from many years of working and saving, traditional virtues emphasising hard work, saving, enterprise and deferred gratification are likely to get eroded. Yet these are values on which capitalist liberal democracy ultimately depends."
"One of the key sociological developments of our time has been the emergence of a division between a majority of families who are accumulating wealth through home ownership and a marginalised minority who have few assets, little material stake in their society, and no realistic prospect of accumulating wealth or passing it on to their children..Rapidly rising house prices make it more difficult for non-owners to get a foothold ..and new buyers..may have over-stretched themselves."
I do disagree with Mr. Saunders on this one, "it is sometimes argued that capital gains from the housing market do not represent real increases in personal wealth because owners cannot get their hands on the money." See this post to clear that up.