Land Markets and Business Cycles
in the United Kingdom and Australia
- Banks, R, Costing the
Earth, London: Shepheard-Walwyn, 1989, p.39, 46. £23 bn
capital consumption was omitted from the 1988 house buildings
value calculation (CSO Blue Book 1991, p.100), raising the land
residual to 53% of total British housing stock value, as against
35% in 1985. Banks (p.39) calculates the capital value of all land
in GB in 1985 to have been about £500 bn, or 43% of the £1160
bn relevant asset value in the national balance sheet (1991 Blue
Book, p.90). The Central Statistical Office has not produced
national balance sheet figures for 1988, but the percentage of
land to total real estate value would have been above the 53%
estimated for dwellings.
... For the USA, Mason Gaffney
concluded in 1970 that "land value today is at least half of
real estate and probably more" ("Adequacy of Land as a
Tax Base," in The Assessment of Land Value, ed.
Daniel M. Holland, Madison: Univ. of Wisconsin Press, 1970,
p.181). For Australia, R.H.Scott reported that land comprises less
than 40% of the aggregate price of land and improvements (The
Value of Land in Australia, Centre for Research on Federal
Financial Relations, Research Monograph No. 47, Canberra: The
Australian National University, 1986, p.3). However, his data
preceded the property boom of the late 1980s. For Denmark, Anders
Muller reported that the land component of all real estate was as
low as 30% in 1986 (Banks, p.169).
- The land price changes are
from the Department of the Environment's price index of private
sector residential building plots at constant average density in
England and Wales, as published in its quarterly Housing and
Construction Statistics series, London: HMSO. The house price
changes are from the Nationwide Building Society's mix-adjusted
price index for all houses.
- March 14, 1992, p.16.
- "Cyclical and Sectional
Variations in the Sale of Public Lands, 1816-60," in Review
of Economic Statistics (9), 1927, pp.41-53.
- One Hundred Years of Land
Values in Chicago, Chicago: University of Chicago Press, 1933
- Fred Harrison, The Power
in the Land, London: Shepheard-Walwyn, 1983, pp. 109-110, 117.
- Basic Principles of
Economics and their Significance for Public Policy, Columbia,
Mo: Lucas Brothers, 3rd ed., 1955, pp. 123-124.
- The sources for the land price
data are detailed by the author in the two appendices to this
chapter. The land price data is based on the sum of all individual
site values at July 1st each year. The entries shown for 1961 and
1967 are the average growth rates for 1958 to 1964 and 1965 to
1969, respectively. The other data are taken from various volumes
ofthe International Monetary Fund's International Financial
Statistics Yearbook and the UK Central Statistical Office's
Blue Book. The Melbourne median house price data were compiled by
Ross King in Monopoly Rent, Residential Differentiation and
the Second Global Crisis of Capitalism, Vol.28, pt.3 in the
Progress in Planning series, Oxford: Pergamon, 1987,
- "The Surprising Incidence
of a Tax on Pure Rent: A New Answer to an Old Question," in
Journal of Political Economy 85, April 1977, pp.350-351.
- D.F.Hendry, "Econometric
modelling of house prices in the UK," in D.F.Hendry and
K.F.Wallis, Econometrics and Quantitative Economics,
Oxford: Blackwell, 1984, pp. 226-227.
- Op. cit., p. 230.
- The Rt. Hon. Robin
Leigh-Pemberton, in Glasgow, 23 May 1991 (Bank of England Press
- Kenneth Taeuber, "A
Century of Experience with Land Value Taxation," in A.
Woodruff, et al., (eds.) International Seminar on Land
Taxation, Land Tenure and Land Reform in Developing Countries,
Phoenix: John C. Lincoln Foundation, 1967, pp. 136-137.
- Op. cit., pp. 3-4.
- Comparing Banks' figures, op.
cit., p.39, with the UK balance sheet valuation for 1985 in
the 1988 CSO Blue Book, London: HMSO, pp. 86-93.
- The Australian GDP data are
for the fiscal year ending June 31st, and are taken from the 1989
issue of Year Book of Australia (Canberra: Australian
Bureau of Statistics) and the OECD series Main Economic
Indicators (Paris). The capacity utilisation data for both
countries is provided by the latter source.
- The Department of the
Environment's private residential building land price index has
been deflated by an index of money GDP, to indicate the growth in
the capital value of the country's land relative to the growth in
its annual output. This indicator suggests that the capital value
of UK land in 1988 had more than tripled its ratio to GDP of 1963.
Of course, the increase in the amount of housing land is not taken
into account, nor its value relative to other types of land (a
fault overcome in Figure 10).
- Using the OECD's "medium"
measure of money, "M1 plus quasi-money", in Main
Economic Indicators, op.cit..
- The breakdown of gross
domestic fixed capital spending into its real property related
components (dwellings, other new buildings and works, and transfer
costs of land and buildings) and other components (plant and
machinery, and vehicles, ships and aircraft) for the UK, is taken
from the CSO's Blue Book (United Kingdom National Accounts),
1991, p.94, and Economic Trends, Annual Supplement, 1988,
p.52. For Australia, the ABS's Australian National Accounts,
1976, p.29, and 1982, p.5, and various issues of the OECD's Main
Economic Indicators were consulted. The Australian data
differs in that it refers to private sector investment only -
generally more than two-thirds of the total.
- Ross King's account will be
followed here, op. cit., p.221.
- IMF, op.cit.; OECD, op.cit..
- Land prices (UK) or aggregate
land values (Australia) are preferred, but to fill the gaps where
they are not available house prices have been used. For the UK,
the Nationwide Building Society's average UK house price index is
taken from M.C.Fleming and J.G.Nellis, Spon's House Price Data
Book, London: Spon, 1987, p.301. For Australia, Ross King's
graph of median real house prices in Melbourne is used, op.cit.,
- Op. cit., p. 226.
- N. Clerehan, 28 Feb. 1972, in
Age, quoted in Leonie Sandercock, Cities for Sale, London:
Heinemann, 1976, p.145.
- Op. cit., pp. 279-280.
- The practicability of
increasing these taxes, and their revenue raising potential, is
discussed by the author in The Sisyphus Syndrome, op. cit..
- June 14, 1989, p.3.
- Letter to Keith Thomas,
published in The Georgist Quarterly, Sydney: Association
for Good Government, July 1991, p.2.
- Odd Man In, April 4,
- Reported in the London Financial
Times, February 11, 1992.
- "Carrot and stick for
middle classes", Financial Times, April 13, 1992.
- Frank Brennan, Canberra in
Crisis, Canberra: Dalton Publishing Company, 1971, pp.107,
- Ibid., p.156.
- Department of Urban and
Regional Development, Canberra: Australian Government Publishing
- Ross King, op. cit.,
- Fred Harrison, op. cit.,