As most Australian readers would know, I recently lost half of a bet over Australian house prices when the Government’s “First Home Owners Boost”–which I prefer to call the First Home Vendors Boost–reignited Australia’s house price bubble.
As a result, I’m walking from Australia’s Parliament House to Australia’s highest mountain, Mt Kosciousko–a distance of 224km (140 miles). The walk will start at 2pm on Thursday April 15 from the entrance to Parliament House and–my legs willing–finish 8 days later on the summit of Mt Kosciousko (which is 2228 metres–or about 7000 feet–above sea level).
I have started a new blog www.keenwalk.com.au to support the walk, which I will use to draw attention to the absurdity of basing economic policy on making housing less affordable.
I would be delighted to have the company of any blog members or readers who can spare an afternoon for a 15km or so walk with me. Full details are given on the other blog, but in a nutshell I will be running about 15km every morning, and walking about the same distance every afternoon starting at about 2pm (anyone who can make it to Canberra one evening should have no difficulty driving to the start of any given day’s walk, since the entire drive from Canberra to Mt Kosciousko can be done in less than 3 hours).
The site won’t be as active as Debtwatch–I can barely handle the workload from one blog, let alone two! (Incidentally, Debtwatch is now getting about 60,000 unique readers each month). It has a static front page explaining why I’m doing the walk, and other pages for sponsorship, talking about the charity I’ll be supporting, and so on. During the walk itself I’ll blog frequently about the day’s activities, how I’m bearing up physically, who came along for the day, etc.
I reproduce the press release launching the new site below. Please go to the site to read the “Why I’m Walking” front page, which is an exposition on the housing bubble in Australia. I’ll copy that post to here in a few days time, but for now I’d like to get the new site inaugurated with a large number of visitors.
And if you can afford a day or so to come along and join me for the walk, please do sign up!
Launch of www.keenwalk.com.au
Steve Keen lost half of a famous bet with Macquarie Bank’s Rory Robertson when Australian house prices set a new record in September of last year. As a result, Steve is walking from Parliament House in Canberra to Mt Kosciousko—a distance of 224km. The walk will start on April 15th at 2pm. Steve plans to cover about 30km a day and finish in the afternoon of April 23rd.
Steve is hardly cowed by having lost half of the bet. “The main bet, over whether house prices here would fall by about 40% over 10–15 years as they did in Japan, is still alive and well”, he noted. “Rory may yet have to follow in my footsteps.”
He also commented that even critics of his outspoken views on the economy agree that the Rudd Government’s “First Home Owners Boost” was the main reason house prices were still rising a year after Robertson proposed the bet. “Even Terry McCrann, who’s hardly a fan of mine, agreed that my nickname for it—the First Home Vendors Boost—is apt (“Behaving stupidly on first home buyer grant”, Herald-Sun November 3rd 2009). All the Boost did was drive up prices, as first home buyers used the extra A$7,000 to borrow another $30–50,000 that they handed over to the sellers.”
“Now, as Fujitsu Consulting has shown, almost half of those new owners are financially stressed. The money they borrowed stimulated the economy, but what will happen to them and the economy when they can’t afford to keep up the payments? They are potentially the sacrificial lambs of Australia’s so far successful evasion of the GFC.”
“I’m happy to walk from Parliament House to Mt Kosciousko if I can draw attention to the absurdity of basing economic policy on making housing more unaffordable.”
Today Professor Keen launched the website www.keenwalk.com.au, which will support the walk and raise funds for the charity Swags for Homeless.
“Swags for Homeless is a brilliant Australian innovation, providing real help now to the 16,000 people sleeping rough in this Lucky Country. Every $60 raised will provide one homeless person with a portable weatherproof swag, to make those evenings in the open less uncomfortable.”
Professor Keen will do the walk solo if necessary, but he’s more than happy to be joined by others. “If you agree that Australia’s housing prices and policies are crazy, and you can manage a 15km walk, then sign up at www.keenwalk.com.au and join me for an afternoon stroll on the road to Mt Kosciousko.”
