I think the importance of the supply issue is overblown. The major factor is always availability of credit. Potential buyers can only pay with available funds no matter how much they would like to borrow. If I see banks moving back to zero deposit/equity loans then I'll believe the property market is going to move up again. Only because that is where we've just been, so it stands to reason that for property to even stay at par level, credit availability has to stay at or above that peak. P/e's ratios may be good for you given your buy-in point, but for new investors they don't look very attractive. I live in one of the most tightly held areas in Melbourne (Middle Park) and I've never seen so many properties passed in. This time last year everything that went up was sold, everything.[/quote
Valid points albeit some are extreme. Everything has an intrinsic replacement value,Land + developement+ improvements. There are areas where excellent value can be found. As for your properties being handed in --- many who are seeing interest rates plummet and pressure coming off are now and in the future in the position NOT to sell if they don't wish to. Put that into your future equations.
For those who think Australia won't have double digit unemployment and huge government deficits, followed by rising taxes, you're kidding yourselves. Last time I checked over 2/3 of our economy was in the services sector. This will be hit very hard by a reduction in consumer spending. Just wait for the dark news that's going to follow this coming xmas period, even with the one-off Rudd hand outs to pensioners etc, which is the only thing that will stop a quarter of negative growth anyway. Add to that a depressed commodities sector, problems in the agri sector and it's not looking like a soft landing.
Very possibly.But there are many very cashed up 30-65 yr olds who will hoard their hard earned,I'm one,we will also release it when opportunity arises.
I mean, why on earth would anyone think Australia is well placed to survive this global downturn? The government reviews it's outlook every month. Massive rate cuts, stimulus packages? These are emergency measures, not something an economy that is "well placed" needs to do.
You bet they are. To not would be irresponsible.Its quite possible they will over react!
Being as we are, a satellite to China's economy, I'm even more concerned. They're doing so well they have just unveiled a $500bn+ stimulus package. Tell me that isn't the writing on the wall.
China firstly isn't insolvent.2ndly it has this massive population which is moving very quickly toward westernisation. They love the wealth it creates.
They are willing to encourage that.Not to mention India. I'm certain we will get a bigger share of the pie than most.
The problem for housing is that peak credit for the baby boomers has been reached. The next driver for credit growth is where? The subsequent smaller generations of Australians who are going to have to pay higher taxes to support retiring baby boomers?
I think the aim is and should be sustained growth.Outlier moves like that which we have seen will return but not for many years. Eventually wages and affordability will return to a more realistic par.We wont see 30 or even 15% / year on a sustained basis for many years, but those who do selectively invest in property can do very well long term.