# Urban location, housing debt and oil vulnerability



## ivuernis (5 Jul 2006)

A newly published report <[broken link removed]> by Australia's Urban Research Program examines the spatial vulnerability of Australian urban areas to fuel price and mortgage interest rate rises. 

It is obvious that Ireland is just as susceptible to rising fuel prices and mortgage interest rates given our poor urban planning, lack of adequate public transport and resultant car dependency. Rising fuel prices and interest rate rises are inextricably linked through inflation and the predicted peaking of world oil production in the very near future will mean that inflation will become difficult to curb and economic growth could suffer with the very real possibility that the spectre of stagflation could return. 

In light of such a potential scenario how are today's property prices either (a) sustainable or (b) justifiable?


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## Calina (5 Jul 2006)

ivuernis said:
			
		

> A newly published report <[broken link removed]> by Australia's Urban Research Program examines the spatial vulnerability of Australian urban areas to fuel price and mortgage interest rate rises.
> 
> It is obvious that Ireland is just as susceptible to rising fuel prices and mortgage interest rates given our poor urban planning, lack of adequate public transport and resultant car dependency. Rising fuel prices and interest rate rises are inextricably linked through inflation and the predicted peaking of world oil production in the very near future will mean that inflation will become difficult to curb and economic growth could suffer with the very real possibility that the spectre of stagflation could return.
> 
> In light of such a potential scenario how are today's property prices either (a) sustainable or (b) justifiable?



They're not. But in any case, they ceased to be justifiable when the average property price exceeded six times the average salary.


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## Sherman (6 Jul 2006)

Taxes make up such an enormous proportion of the price of petrol here that price rises in the cost of gasoline have a proportionally lower impact than they do in countries where petrol is not as heavily taxed - e.g. a 20% increase in the price of oil has a much larger effect on the cost of petrol in the US than it does in Ireland or Britain, because the 'cost' of oil as a proportion of the price the consumer pays is far larger in the US/Oz than it is here, where it makes up only say 30% of the cost the consumer pays.

So my point is price rises in oil will not have as significant impact proportionally on petrol prices here as they would in Australia.


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