Australian House Prices Will Remain High

An IMF spokesman has a crystal ball and says house prices will crash in Australia. Me-thinks he is completely wrong. He says this will happen because houses in Australia are overvalued in relation to income with a large gap between rent and house values.

ANZ representative Paul Braddick says that low rents to average mortgage repayments is not an indication that property is overvalued. House price to income is also not a good guide to what house prices should be. Australians are still buying despite interest rate rises, but interest is still quite low. Obviously people feel their income can cover the cost. Prices are high in Australia due to one very important factor - property is in short supply. Nothing can be done in the short term to correct this. Indeed, tradesmen are holding buyers to ransom making them wait and pushing up labor charges. These factors also increase price.

The availability of land close to centers of employment is tight and supply is virtually fixed. The government is looking to free up land. Not much is out there though. IMF specialists have got it wrong in predicting a slump in Australian house prices. That's a certainty.

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Literacy and Numeracy Skills Are Low in Australia

You would think that with the Internet communication skill would be better than ever. This is clearly not the case. Forty six percent of Australians don't have adequate numeracy and literary skills in order to cope with modern society. Australian industry has called for a literacy entitlement to improve the skills of those in vocational study. Employers aren't getting sufficient numbers of new workers who can read and write to a "normal" level.

Despite Australia's fifth ranking among other countries for education, this problem persists and is getting worse. Even though Australia is developed it appears children are "falling through the cracks" in education. Oddly, a 2009 UN paper put Australia's literacy rate at 99 percent. This is just plain wrong.

A test was developed that covered people's interaction with newspapers, consumer information articles, finance graphs, medicine labels and so on. Calculating interest on a loan or understanding a workplace agreement, for example, was way beyond the ability of the majority. People are very skilled in covering up their shortcomings in numeracy and literacy skills. Many, in fact, become highly skilled orators, while they rely on friends and family to organize the filling out of forms. The main difference, usually, between those who can read and write well and those who cannot is income. Though there are a few illiterate millionaires. Most of those in financial trouble do not understand why.

A Canadian study showed that spending more money on raising the skill levels of people at the bottom of the scale significantly reduced the amount spent on welfare and improved employment. It is not children of immigrants who have problems it is the children of third and fourth generation Australians whose parents have had financial or social problems. Teachers cannot do it alone. They need help from government and the community.

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Interresting Cat

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