[Asia Economy Reporter Park Byung-hee] Articles about skyrocketing housing prices have recently become common even in foreign media. It is a global phenomenon. This is because governments worldwide have loosened fiscal policies and central banks have lowered benchmark interest rates to prevent the economic crisis caused by COVID-19 from dragging the economy into a swamp, resulting in an overflow of money.
Knight Frank, a British real estate consulting firm with a 125-year history, released a report on April 5 (local time) analyzing residential real estate price trends in major cities worldwide for the first quarter of this year.
Among the 150 cities surveyed, 43 cities recorded double-digit annual housing price increases. Three cities saw housing prices rise by more than 30% over one year, one of which was Wellington, the capital of New Zealand. Housing prices in Wellington rose 30.1% over the year. Auckland, New Zealand’s largest city, also saw housing prices increase by 19.6%. Bloomberg Economics named Canada, Sweden, and New Zealand last month as the countries with the highest risk of housing market bubbles in the world.
"Over the past few years, numerous billionaires owning private jets have built a 'Noah’s Ark' in New Zealand, which is a thirteen-hour flight away from the United States."
Hans-Peter Martin, a world-renowned scholar born in Austria, wrote this in his 2018 book Game Over. Martin co-authored the global bestseller The Global Trap, which sold over 800,000 copies worldwide since 1996. Game Over is his new book released after 22 years.
The "Noah’s Ark" that billionaires have built refers to real estate. The massive flood they are trying to escape by buying this ark symbolizes movements aiming to overturn society. According to Martin, some wealthy individuals feel anxious that they could become targets if extreme economic inequality fuels energy to overturn society. Therefore, they are preparing refuges in places that are among the few remaining paradises on earth but are difficult to access without an airplane. Martin jokingly wrote, "New Zealand has vast lands where helicopters can take off and land."
A senior colleague I once worked under asked me what happens when the social class structure becomes an extreme pyramid, and said that the very top richest people will eventually fall off the pyramid and go to another world. Watching Jeff Bezos, chairman of Amazon’s board, fly away on a spaceship reminded me of that senior’s words.
COVID-19 has newly awakened awareness of inequality. The U.S. Federal Reserve released a report on March 27 last month stating that U.S. household assets increased by $13.53 trillion, the largest increase in 30 years. One-third of the increased assets belonged to the top 1% high-income earners. This confirmed that it is truly a capitalist world where money makes money.
In our society, ahead of the presidential election, the term "hereditary economy" has emerged, and resolving inequality has become a hot topic. Wasn’t "hereditary" a label only used for the North Korean regime in the past? After democratization, social discourse disappeared, and the "young people," who were criticized for not understanding society, are now shouting to the "kkondae" (older generation) that it is a different world by discussing fairness.
Coincidentally, September 17 this year marks the 10th anniversary of the Occupy Wall Street protest, which shouted "We are the 99%."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
