Toorak mansion sold to mystery buyer for a record $18 million.

After a knock on the door and a walk thru, an unknown buyer puts an offer. The buyers advocate compares the sale to an 1880's gold rush. The 100-square two-storey English style-mansion was sold about five years earlier for $5.4 million. A little later the parcel of land next door (a tennis court) was bought for another $1.2 million. About $1 million was spent on renovations. As is usual for titleholders of highly prized sites, criminal fines for insider trading, & allegations of tax evasion using a Charitable Foundation plagued the vendor. While the price is believed to be a record, it might be trumped by a bid for a similar site being marketed as Stonnington mansion. 29 May 2007 Craig Binnie and Nicole Lindsay Herald Sun

April Foreclosure Filings More Than Double Over 2006

(Update1)

By Bob Ivry May 7 (Bloomberg) -- U.S. homeowners entered the foreclosure process in April at more than double the rate of a year ago as tightening credit made it more difficult to refinance and a swelling supply of unsold homes made it tough to sell. The number of homeowners in all three phases of foreclosure rose last month over the same period a year ago, according to Sacramento-based Foreclosures.com, which gathers data from county courthouses nationwide. Those receiving their first notice of foreclosure from a bank climbed 127 percent, those with homes going up for sale by auction jumped 164 percent and those whose homes were repossessed by banks went up 40 percent. Eight of 10 subprime loans, given to borrowers with bad or limited credit histories, adjust over time to higher interest rates and many homeowners can no longer afford their mortgages. With existing home sales at a four-year low, it's more difficult to sell because there are so many homes on the market. ``The housing boom was a house of cards,'' said Alexis McGee, president of Foreclosures.com. ``A lot of people who are living beyond their means and borrowing from Peter to pay Paul find that it's starting to catch up with them. We're seeing the effects of aggressive lending and minimal standards for underwriting.'' The number of foreclosure filings decreased in April in all three categories compared with March, Foreclosures.com said. Notices of default dropped 16 percent, auctions decreased 12 percent and bank repossessions fell 14 percent. The March 2007 numbers compared with a year earlier were similar to the increases of April 2007 over April 2006. First filings increased 126 percent in March 2007 compared with March 2006, notices of auction climbed 121 percent and the number of bank repossessions grew 51 percent, Foreclosures.com said. Avoiding Foreclosure The numbers show that many homes that begin the foreclosure process don't end up owned by banks, McGee said. ``A lot of these homeowners are getting new financing or they're selling it before the auction,'' McGee said. ``The owner is able to figure out a way to get his house in order before his house is taken away.'' In the first four months of this year, homes in all three phases of the foreclosure process increased from the same period a year ago, Foreclosures.com said. Notices of default and auctions more than doubled, while bank takeovers, or REOs for ``real estate owned,'' rose 39 percent. Purchases of existing homes dropped in March to an annual rate of 6.12 million, from 6.68 million in February, the biggest decline since January 1989, said the Washington-based National Association of Realtors. Sales fell 11.3 percent compared with a year earlier. According to Zurich-based Credit Suisse, 82 percent of subprime mortgages have an adjustable rate provision, meaning that payments start with low or ``teaser'' rates and adjust to a higher rate after a set number of years. To contact the reporter on this story: Bob Ivry in New York at bivry@bloomberg.net . Last Updated: May 7, 2007 17:36 EDT

What the gatekeeper saw

Rate change will worsen rent squeeze 28/3/2007 At present, council rates in NSW are based on the value of land alone. If the rating base is changed to the value of land plus buildings, as suggested by Noel Taylor (ST Letters, 4 Feb 2007), the consequences will include the following: * Land owners who build new accommodation or extend existing accommodation will be penalized with higher rate bills. So there will be less building and extending. The shortage of rental accommodation will worsen, making rents less affordable, and jobs will be lost in the building industry. * Families who modify their homes at great expense for the benefit of disabled members will be hit with higher rate bills. * Valuations of buildings will become critical for tax purposes and will therefore need to be more accurate, hence more intrusive, involving more internal inspections. * Landlords will allow properties to deteriorate because run-down buildings will be taxed less than well-maintained buildings. Land-value rating avoids these problems because the land, unlike any buildings erected on it, is not the product of any human effort that can be deterred by taxation. — Rejected by the Sunday Telegraph (Sydney). Posted by G.R. Putland.

No Spring Thaw for Housing

Spring is usually the hot time for home sales. But this year, March results were terrible—and April and May don't look much better By Maya Roney Maybe you guessed it, but now it's official: The housing market has not hit bottom. Poor home sales in cold-and-quiet February may be excusable, but in March, April, and May, they are a sure sign of distress. The latest numbers indicate that the spring of 2007 will go down as one of the worst real estate seasons in years. ...a forward-looking indicator based on contracts signed in March, dropped 10.5% from March, 2006, and 4.9% from February, 2007, to 104.3, the lowest reading since March, 2003. ...existing home sales fell 8.4% year over year, marking the sharpest plunge in 18 years. ...Pat McPherron, housing economist for Moody's Economy.com says "If April doesn't go well, then that's it. This is the market." ...the National Association of Home Builders/Wells Fargo Index measuring builder confidence fell to 33 from 36 in March (a reading below 50 means most respondents view conditions as poor). ...house prices accelerated faster than incomes during the housing boom. "What [subprime lenders] have done is stopped the bleeding." says McPherron

Godliness is close to speculation.

As a Big Landowner Plans to Sell, Mouths Begin to Water

By JAKE MOONEY

Published: May 6, 2007



Brookyn Heights

In the lobbies of some of the buildings near the Brooklyn waterfront owned by the Watchtower Bible and Tract Society, visitors can pick up plastic-wrapped packets of postcards depicting the organization’s various properties. On one, an aerial view of Brooklyn Heights, it seems as if nearly every third building is a Watchtower dormitory.



Since 1909, the neighborhood has been home to Brooklyn Bethel, as the organization, whose members are known as Jehovah’s Witnesses, calls its world headquarters. Other postcards in the packet, though, tell a story of change: They show neatly dressed volunteers at work in a sprawling new complex north of the city in Wallkill, N.Y., where the Witnesses moved their Bible- and magazine-printing operations in 2004.



Now, the residential buildings are beginning to go, too: The Witnesses plan to sell six of their Brooklyn Heights residences, including the venerable 12-story Standish Arms Hotel building, as part of what they are calling an organizational consolidation. With the printing presses gone and the former warehouse and shipping facility at 360 Furman Street sold, Witnesses spokesmen said, the organization needs less space for members to live.



Besides the Standish Arms, at 169 Columbia Heights, between Clark and Pierrepont Streets, the buildings for sale include four-story and seven-story apartment buildings on the same street, and three 19th-century houses nearby.



The offerings, which were reported in The Brooklyn Eagle, have Brooklyn Heights residents buzzing about the potential for the new properties hitting the real estate market. Residents are also speculating about the future of the former Bossert and Leverich Towers Hotels, two other meticulously restored buildings the organization owns in the neighborhood.



“When people hear that they’re selling the Standish Hotel, they start drooling about the Bossert,” Robert Perris, district manager of Brooklyn Community Board 2, said of the opulent tower at Montague and Hicks Streets, where the Brooklyn Dodgers celebrated their victory in the 1955 World Series. “The speculation runs rampant.”



According to Richard Devine, a Watchtower spokesman, the organization is not working with an outside real estate agent and has no set asking prices, but it will evaluate offers as they come in, as it did with the sale of 360 Furman and three other buildings on Livingston, Hicks and Clark Streets that the organization recently sold.



As for the other 24 buildings that Watchtower owns in the Heights and nearby Dumbo, the organization, as it often does, is keeping its plans close to the vest.



“Currently we don’t have any plans to sell any more,” Mr. Devine said. “At least not at this time.”



ed.,So much for Lev 25:23

Review of Steve Keen, Debunking Economics:

The Naked Emperor of the Social Sciences, London: Zed Books, 2001 Geoff Harcourt (Cambridge University, UK) Steve Keen's Debunking Economics is a provocative book; deliberately so is my conjecture. The anti-Vietnam war movement in Adelaide dichotomised into either militants or moderates. I belonged to the second group, because I thought it the proper way for academics to play a public role in vital political and social issues. I also thought it would be counter-productive to do otherwise (no prize for guessing the respective weights attached to the two reasons). Steve, I'm sure, would have been a militant. Certainly that is his approach here. I worry that this may backfire, for I have sympathy with his aims and many of his arguments and judgements. Time will tell who is right (perhaps I could say that the militants wanted the Australian revolution to occur first, then the troops could be brought home and conscription abolished. The moderates thought it better to get an ALP government elected because these two objectives were core items in Labor's election manifesto). Keen's object is to go behind what is currently taught to economics undergraduates in order to reveal the conceptual bases of their instruction and the ideological purposes involved. He comes to his task with a thorough knowledge of the classics of the subject, of Adam Smith as well as of Karl Marx, and with considerable analytical skills of the modern sort. He is a graduate of the political economy movement at the University of Sydney, and his Ph.D. dissertation was an amalgam of the theories of Dick Goodwin and Hy Minsky, two modern maverick greats, both alas now dead. Goodwin was a pupil and then a colleague of Wassily Leontief and Joseph Schumpeter at Harvard, and a pupil of Roy Harrod and Henry Phelps Brown at Oxford. He was much influenced by Maynard Keynes's writings and by Richard Kahn, Joan Robinson and Piero Sraffa of his Cambridge, England colleagues in the post-war period. Though he ceased to be a member of the communist party by the 1940s he remained an informed fan of Marx's writings, especially of Marx's deep knowledge of how capitalism works. (Joan Robinson used to say of Schumpeter that he was Marx with the adjectives changes.) This background, together with his love of Wicksell's economics and teaching physics at Harvard during World War II, led to Goodwin's pioneering contribution of models of cyclical growth. They incorporated his insight that trend and cycle are indissolubly mixed, not separable and determined by different sets of factors, as usually happens in orthodox economics. Minsky also knew his Marx. He worked with Oskar Lange as a young man. His great contribution was to show how real and monetary factors interrelated to produce cycles as capitalist economies evolved through time. While he drew on the writings of Keynes and Michal Kalecki, his financial instability hypothesis associated with the analysis of the effects on firms and on the economy, of the non-realisation of the expected cash flows arising from investment projects, is highly original. It has proved of greater and greater value in our understanding in recent years of the financial instabilities and crises in the world economy. Keen's contribution is to put these two strands together to provide a structure for illuminating the malfunctionings of modern interrelated capitalist economies. He does this in a way which not only draws on the insights of our past masters but also employs the most modern of analytical techniques. With such abackground it is easy to understand his horror at the contents of modern textbooks.Increasingly they model the capitalist world as though it were conforming to the dictates of Frank Ramsey's benevolent dictator, choosing optimum paths of accumulation over time for all its citizens. Keynes's long run in which "we are all dead" (well, he's dead and we are in the long run, as an IMF wit recently put it) has returned to dominate our supposed understanding of what is happening.Short-term instabilities are viewed as mere aberrations, fluctuations around this long-period optimum trajectory. Against this macroeconomic background, modern microeconomics has a bias towards examining the behaviour of competitive markets (as set out most fully and rigorously in the Arrow-Debreu model of general equilibrium), not as reference points but as approximations to what is actually going on. Of course, departures from them are taught, increasingly by the clever application of game theory. Moreover, the deficiencies of real markets of all sorts are examined in the light of the implications, for example, of the findings of the asymmetric information theorists (three of whom - George Akerlof, Michael Spence, and Joe Stiglitz - have just (10/10/01) been awarded this year's Nobel Prize. From Amartya Sen on, the Nobel Prize electors seem to be back on track). While professional economists increasingly get to know of these and other developments, often through the pages of the excellent Journal of Economic Perspectives, the most used undergraduate textbooks are usually light years away from such enlightenment. Moreover, alternative approaches in our subject, economic history and the history of economic thought are either being marginalized in, or driven out altogether from most undergraduate courses. Keen's book is directed against these trends. He examines what is taught in macroeconomic and microeconomic courses and what their deficiencies and shortcomings are. And he suggest alternatives, some of which come out of the many influences on him and his own contributions. As I said, I understand his impatience and anger and I applaud his aims. I just worry that the tone of the book and, sometimes, his assertions may allow critics to sidetrack the arguments along byways which may seem plausible but ultimately miss the point - to the detriment of the training of future generations in what Keynes memorably called "our miserable subject". Nevertheless, if I were given a free hand to design a course, I would urge my pupils to read both Keen's book and Hugh Stretton's marvellous alternative text (Economics: A New Introduction, published by Pluto in 1999) as well as the best of the mainstream texts now available. (I would also urge them to read some of the great originals too!) Only then would I feel they had been introduced to the appropriate material with which to make up their own minds what approach(es) to take in their studies. As it is, without the insights of a Keen and a Stretton (and of the past greats), I fear we are likely to produce well trained but uncritical cogs, the better to fit the needs of our modern industrialised societies. It is not the proper role of university teachers either to be hired prize fighters or produce them. SUGGESTED CITATION: Geoff Harcourt(2002)“Review of Steve Keen, Debunking Economics: The Naked Emperor of the Social Sciences", post-autistic economics review : issue no. 11, January, article 5. http://www.btinternet.com/~pae_news/review/issue11.htm __________________ This review originally appeared in the Financial Review

Review of Steve Keen, Debunking Economics:

The Naked Emperor of the Social Sciences London: Zed Books, 2001 Steve Keen's Debunking Economics is a provocative book; deliberately so is my conjecture. The anti-Vietnam war movement in Adelaide dichotomised into either militants or moderates. I belonged to the second group, because I thought it the proper way for academics to play a public role in vital political and social issues. I also thought it would be counter-productive to do otherwise (no prize for guessing the respective weights attached to the two reasons). Steve, I'm sure, would have been a militant. Certainly that is his approach here. I worry that this may backfire, for I have sympathy with his aims and many of his arguments and judgements. Time will tell who is right (perhaps I could say that the militants wanted the Australian revolution to occur first, then the troops could be brought home and conscription abolished. The moderates thought it better to get an ALP government elected because these two objectives were core items in Labor's election manifesto). Keen's object is to go behind what is currently taught to economics undergraduates in order to reveal the conceptual bases of their instruction and the ideological purposes involved. He comes to his task with a thorough knowledge of the classics of the subject, of Adam Smith as well as of Karl Marx, and with considerable analytical skills of the modern sort.He is a graduate of the political economy movement at the University of Sydney, and his Ph.D. dissertation was an amalgam of the theories of Dick Goodwin and Hy Minsky, two modern maverick greats, both alas now dead. Goodwin was a pupil and then a colleague of Wassily Leontief and Joseph Schumpeter at Harvard, and a pupil of Roy Harrod and Henry Phelps Brown at Oxford. He was much influenced by Maynard Keynes's writings and by Richard Kahn, Joan Robinson and Piero Sraffa of his Cambridge, England colleagues in the post-war period. Though he ceased to be a member of the communist party by the 1940s he remained an informed fan of Marx's writings, especially of Marx's deep knowledge of how capitalism works. (Joan Robinson used to say of Schumpeter that he was Marx with the adjectives changes.) This background, together with his love of Wicksell's economics and teaching physics at Harvard during World War II, led to Goodwin's pioneering contribution of models of cyclical growth. They incorporated his insight that trend and cycle are indissolubly mixed, not separable and determined by different sets of factors, as usually happens in orthodox economics. Minsky also knew his Marx. He worked with Oskar Lange as a young man. His great contribution was to show how real and monetary factors interrelated to produce cycles as capitalist economies evolved through time. While he drew on the writings of Keynes and Michal Kalecki, his financial instability hypothesis associated with the analysis of the effects on firms and on the economy, of the non-realisation of the expected cash flows arising from investment projects, is highly original. It has proved of greater and greater value in our understanding in recent years of the financial instabilities and crises in the world economy. Keen's contribution is to put these two strands together to provide a structure for illuminating the malfunctionings of modern interrelated capitalist economies. He does this in a way which not only draws on the insights of our past masters but also employs the most modern of analytical techniques. With such a background it is easy to understand his horror at the contents of modern textbooks. Increasingly they model the capitalist world as though it were conforming to the dictates of Frank Ramsey's benevolent dictator, choosing optimum paths of accumulation over time for all its citizens. Keynes's long run in which "we are all dead" (well, he's dead and we are in the long run, as an IMF wit recently put it) has returned to dominate our supposed understanding of what is happening. Short-term instabilities are viewed as mere aberrations, fluctuations around this long-period optimum trajectory. Against this macroeconomic background, modern microeconomics has a bias towards examining the behaviour of competitive markets (as set out most fully and rigorously in the Arrow-Debreu model of general equilibrium), not as reference points but as approximations to what is actually going on. Of course, departures from them are taught, increasingly by the clever application of game theory. Moreover, the deficiencies of real markets of all sorts are examined in the light of the implications, for example, of the findings of the asymmetric information theorists (three of whom - George Akerlof, Michael Spence, and Joe Stiglitz - have just (10/10/01) been awarded this year's Nobel Prize. From Amartya Sen on, the Nobel Prize electors seem to be back on track). While professional economists increasingly get to know of these and other developments, often through the pages of the excellent Journal of Economic Perspectives, the most used undergraduate textbooks are usually light years away from such enlightenment. Moreover, alternative approaches in our subject, economic history and the history of economic thought are either being marginalized in, or driven out altogether from most undergraduate courses. Keen's book is directed against these trends. He examines what is taught in macroeconomic and microeconomic courses and what their deficiencies and shortcomings are. And he suggest alternatives, some of which come out of the many influences on him and his own contributions. As I said, I understand his impatience and anger and I applaud his aims. I just worry that the tone of the book and, sometimes, his assertions may allow critics to sidetrack the arguments along byways which may seem plausible but ultimately miss the point - to the detriment of the training of future generations in what Keynes memorably called "our miserable subject". Nevertheless, if I were given a free hand to design a course, I would urge my pupils to read both Keen's book and Hugh Stretton's marvellous alternative text (Economics: A New Introduction, published by Pluto in 1999) as well as the best of the mainstream texts now available. (I would also urge them to read some of the great originals too!) Only then would I feel they had been introduced to the appropriate material with which to make up their own minds what approach(es) to take in their studies. As it is, without the insights of a Keen and a Stretton (and of the past greats), I fear we are likely to produce well trained but uncritical cogs, the better to fit the needs of our modern industrialised societies. It is not the proper role of university teachers either to be hired prize fighters or produce them. Geoff Harcourt(2002) “Review of Steve Keen, Debunking Economics: The Naked Emperor of the Social Sciences", post-autistic economics review : issue no. 11, January, article 5. __________________ This review originally appeared in the Financial Review

Tenants forced to give up pets.

Wednesday, 25 April 2007, 15:09 GMT 16:09 UK People who rent property in Jersey have been forced to give up their pets because of restrictive contracts, said Jersey's Animal Shelter (JSPCA). Residents who rent houses or flats have to obey a clause not to keep pets. JSPCA's chief executive Stephen Coleman said the amount of animals left in their care had risen by 15-20%. He said there was a significant rise in cats. But letting agent Julian Cubbage said he did not think renting contracts were becoming more stringent. He said there had always been an historic sensitivity to animals and that pets were not allowed in homes because of the damage they may cause. "There's also a nuisance factor to other owners - it's not very satisfactory if every time you walk past a flat door you have a dog barking at you from the other side," he said. Mr Cubbage advised residents to question the contracts as compromises could be made.

Real Estate Tax Levied On 300,000 Houses Up 90%

donga.com APRIL 30, 2007 03:43 The publicly assessed values of apartment and row houses largely increased this year by an average of 22.8 percent from last year. Detached houses increased by 6.22 percent in value.

In particular, there has been a sudden rise in many areas within the Seoul Metropolitan Area, including Yangcheon-gu (46.1 percent) in Seoul, and Gwacheon City (49.2 percent) in Gyeonggi Province. As a result, the tax burden caused by holding real estate, including composite real estate taxes and property taxes, increased.

The Ministry of Construction and Transportation (MOCT) announced yesterday that this year’s publicly assessed value of 9.03 million apartment houses would be released on April 30. The publicly assessed value of 4.05 million detached houses will also be released by each municipal and regional office on April 30.

This publicly assessed value has been confirmed through an opinion hearing period last month. Any issues can be raised to the MOCT, municipal and regional offices, and the Korea Appraisal Board by May 30. The number of houses valued over 600 million won almost doubles- As the publicly assessed value rose remarkably, the number of houses valued over 600 million won, which is a basis for composite real estate taxes, increased to 300,711, up by almost 90 percent from last year (159,115). Among the houses valued over 600 million won, 99.8 percent of apartment houses and 97.1 percent of detached houses are located in the Seoul Metropolitan Area, including Seoul City. According to an estimate conducted by the National Tax Service (NTS), the number of households subject to composite real estate taxes amounts to 381,000 this year, up 149,000 from last year (232,000). This is just from taking into consideration houses owned by individuals and, if corporation-owned houses and land were also considered, composite real estate taxes would be imposed on 505,000 households. The reason why the number of households subject to composite real estate taxes is larger than that of houses valued over 600 million won is because publicly assessed values of all the houses owned by a household are added all together to determine on whether composite a real estate tax should be levied. For example, in cases when a husband and wife own 400 million won and 300 million won apartment houses, a composite real estate tax is not imposed on each apartment house. However, the household should pay composite real estate tax based on the total of each apartment’s value. Those who own only one house will pay 2.31 million won on average in composite real estate taxes- The composite real estate tax burden for households is expected to increase rapidly. According to the NTS, this year’s average composite real estate tax burden for households that paid the composite real estate tax last year amounts to 4,743,000 won, more than double last year’s (2,108,000 won). This is because publicly assessed value has increased remarkably and the taxable amount basis increased to 80 percent from 70 percent last year. Households subject to composite real estate taxes for the first time this year will pay 799,000 won on average. Also, among those who own only one house, 139,000 households became subject to that composite real estate tax this year. These households will pay 2,317,000 won composite real estate taxes on average. Property tax increased by 11.1 percent on average compared to last year, but the tax amount imposed on houses valued over 600 million won jumped by 39.3 percent on average. Accordingly, holding taxes, which are the sum of composite real estate taxes and property taxes, are expected to be close to the tax burden ceiling (three times the tax paid previous year) in many areas. In terms of some areas which local governments exempted from property taxes, real estate holding taxes will actually triple since the exempted amount is not considered when determining the tax burden ceiling. According to Kim Jong-pil, a tax expert, a 34-pyeong unit in Eunma Apartments in Daechi-dong, Gangnam-gu, Seoul was subject to holding taxes of 2.16 million won last year; that went up to 5.80 million won this year. The holding tax amount for a 35-pyeong unit in new town complex 3 located in Mok-dong, Yangcheon-gu will almost triple from 1.35 million won to 3.71 million won. Sudden decline in sale prices followed by civil appeal for “publicly assessed vale adjustments”- There are some areas where publicly assessed value is higher than market value. Some publicly assessed values were dated on January 1, 2007, a time when the market value was higher than now. The actual transaction price of a 34-pyeong unit Eunma apartment reported on April 16 was one billion won, which is lower than this year’s publicly assessed value (1.008 billion won). If house prices continue to fall, the publicly assessed value, which was determined based on 80 percent of market value, will highly likely become similar to or higher than present house prices. Due to a large decline in sale prices, there has been a wave of civil petitions to lower publicly assessed value. The number of petitions sent to the MOCT in the 20 days after March 14 amounted to 56,355, up more than six times from last year (9,000). The MOCT explained, “The publicly assessed value cannot be readjusted with house prices changes since the assessment basis date, according to the rules.”