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There was a big jump today in the expectation for further official interest rate cuts. Market expectation is 6.5% OCR by the end of this year, and 5.75% by May. The chance of a cut next month is back up to 100% (was 70% on Friday). http://www.asx.com.au/data/trt/ib_expectation_curve_graph.pdf

Hi Kenneth, Not in the near future, in my opinion. But perhaps in the far future, after the next boom, depending on whether or not the next boom takes prices to unrealistic levels (i.e. 20-40% overvalued). At the moment, I don't think Australian houses are overvalued, and in fact compared to...

Correct. This has been discussed on other threads... i.e. the argument that median price does not need to rise in line with wages, due to the growing population, ever increasing demand for housing, cheaper and easier credit, improved standard of median housing etc. And will continue to...

Here are the prices for Sydney, Melbourne and Brisbane, using log scale, with trend lines extending to 2020.

Which is what happens in all the 'busts'... the line flattens to inflation, or a bit above or below. Overall, if you take the average across Australia - i.e. fall in Sydney and very slight raises in other states, overall prices simply flattened out, stagnated across Australia, as was the case in...

Here is the same data on log scale...

Most of that growth occurred in late 2006 to 2007 as we have just recently moved back into the growth phase. The stagnation period was from late 2003/2004 to 2006... the lines are very flat for that period. If we look back over the past 30 years as per the graph below, we can see that this is...

Alex & YM, I really don't understand what we are arguing about... in some cities there was a boom, then a flat period or slight fall, and now another boom is starting. In other cities the boom kept going for a bit longer and now we may be entering the flat period for a while and soon there will...

Hi YM, Check the graph. When prices are not keeping up with inflation, this means effectively zero to negative growth. If that lasts for several years it is certainly the end of the bubble. This is what happened. And in real terms, Sydney, Australia's largest housing market, quite clearly...

Alex, yes. But if you don't believe me then I'm happy to let the graph do the talking. Prices across Australia have barely kept up with inflation since 2004. Some cities started to grow strongly again in 2007. I believe Sydney will take off again in 2008. I think the stagnation across...

I wasn't talking about the 'higher-end'. I am referring to the overall market. It is pretty well understood that the median price fell approx 10% in Sydney and then stagnated throughout the majority of Australia between 2004 to 2007, apart from WA and NT where this only started to happen this...

Hi Kenneth, I think this omits the fact that the Australian housing market already burst after 2003... so in a way the other countries you mention are simply following Australia's lead by bursting one after the other, and now Australia should also be the first one to recover leading to the...