Countries on the road to recovery

I wasnt going to give this question its own thread but im very interetsed in what people think on the subject.

Right or wrong. Australian property prices are frequently compared to other countries. With the end result of Australian values looking very overpriced in many areas.Now we have all heard the reasons why so i wont go there.

Now i ask is it fair to compare values to countries that are in recessions and massive debt problems. To me this is comparing countries while they are at different stages of economic prosperity/slump/crash whatever.

So what do we expect will happen to property values in problem countries after they start there sustained recovery.

Example would be the states. Yeah heaps cheaper than here.

But when/if they recover do we expect the values to stay low, start a modest recovery back to average growth, or do we expect a quite rapid recovery in values back to previose highs or beyond when there economies allow.

I ask because of my thoughts on where we are heading.

I believe Australia will see modest growth over the next 7 to 10 years tracking cpi give or take before we see any significant boom.
But i also believe many of the countries that are now in trouble. Will see great growth within this same period possibly overtaking Australia's position in the housing affordability ladder.This will depend completely on the size of each countries recovery.

I have no graphs,charts or insider information. just a gut feeling from what i see.

So what are other peoples thoughts. How do we think these countries will perform in the decade of recovery compared to Australias hopefully steady as she goes approach.

Cheers
 
I really fear that the tsunami thats building around the world is going to smash us...anyone heard of the wave theory?

Small problem in greece spreads around europe (euro survival is deemed to be small; HURRAY! euro was always the testing phase of a one-world currency and government so I want to see it fail)

This wave will hit the USA when ppl begin to focus on its debt levels and its increasing apparent that they are going to struggle to pay their debts (USA is not dead ala europe, they can still steer the ship)

If the USA can not overcome their debt problems...china will have its exports to USA and europe smashed, which in turns means its demands for our resources way down...

What does this mean to our economy? Unemployment goes up, ppl can not afford to pay more for houses so houses prices come down.

atm...there is a major deflationary period happening, and the central banks monetizing of debt has not been able to stabilize or inflate prices. Either "mass-printing" of money to cover debt will occur which might mean hyper-inflation or all the debt will need to be forced out of the systems around the world which will be highly deflationary.

In other words...I don't see a road to recovery in europe or usa at the moment. They can stabilize but it will be years before they begin recording modest growth again.
 
I believe that the Eurozone's weakness is being overblown, and that there are bigger problems elsewhere. The national debt and deficit in both the US and UK are much more serious.

At some point the markets will wake up to this.

I don't know how things will play out in the longer term. I think that there are two possible outcomes.

The first is that the Euro will fracture and some states will leave. This could potentially be the PIIGS. But just as likely it could be Germany and perhaps some of its neighbours like the Netherlands, who go on to form a much harder currency union.

The second is that the crisis leads to a much tighter fiscal integration of the Eurozone countries, along with stricter rules on deficits and debt. This would bring about economic governance across the EU, and resolve some of the pre-existing problems with the currency.

My gut feeling is that option two will be taken, as there would be major economic and political consequences of the first option.

Longer term I think that the EU might be better placed than the US.

There's talk of requiring that government budgets being audited by their peers, which could be a cheap and effective way of keeping countries in line. The UK is setting up an Office of Budget Responsibility, and though it's not in the Eurozone, it's in tune with the mood on this side of the Atlantic.

And the fashionable view that European companies aren't that dynamic might not be true. See this article from Newsweek.
 
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I believe that the Eurozone's weakness is being overblown, and that there are bigger problems elsewhere. The national debt and deficit in both the US and UK are much more serious.

At some point the markets will wake up to this.

I don't know how things will play out in the longer term. I think that there are two possible outcomes.

The first is that the Euro will fracture and some states will leave. This could potentially be the PIIGS. But just as likely it could be Germany and perhaps some of its neighbours like the Netherlands, who go on to form a much harder currency union.

The second is that the crisis leads to a much tighter fiscal integration of the Eurozone countries, along with stricter rules on deficits and debt. This would bring about economic governance across the EU, and resolve some of the pre-existing problems with the currency.

My gut feeling is that option two will be taken, as there would be major economic and political consequences of the first option.

Longer term I think that the EU might be better placed than the US.

There's talk of requiring that government budgets being audited by their peers, which could be a cheap and effective way of keeping countries in line. The UK is setting up an Office of Budget Responsibility, and though it's not in the Eurozone, it's in tune with the mood on this side of the Atlantic.

And the fashionable view that European companies aren't that dynamic might not be true. See this article from Newsweek.


Graemsay

I couldn't have written it better myself and to answer Devo's question, I think resource rich nations such as Canada, Australia, Norway etc plus the Asian countries will be the most growth regions in the short term.

In the long term the world won't end but the US IMO will be the slowest western nation to recover and this because it lost it's competitiveness (their $ is going up again when it should be going down), they have unsustainable budget deficit so taxes have to rise or services will have to be cut, their health reform is unaffordable etc etc.

Unfortunately things aren't looking good for them, they have no plans to bring their budget deficit under control and I don't know how they're going to pay back their existing debt. Perhaps they don't care about paying it back?
 
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this forum is an excellent take on fear vs greed.
As the years progress it swings from one to the other.

Just a few years ago, the vast majority of postings where:
(a) property related and a debate over the sustainable withdrawal rate in effective reverse mortgages (some people justified it going to 10% given that property 'doubles' every 10 years).
Now: pretty much silence on this issue.
(b) shares: no idea really but hey look everything is going up, wiiing, maybe property investment should be used as a basis to accumulate a base level, then talley ho, its off to the stock market we go, with a broker in hand, a margin loan, and an ASX that cant go wrong, talley ho talley ho ho
Now: its talley ho talley ho, its off to the stockmarket we go, with a broken broker in hand, a blown up margin loan, and an ASX that definately can go wrong, talley ho (and subsequent silence).

To present day:
(a)australian residential property: still the last bastion of strength (naivity)
or
(b) exteme pessimism where every shadow under the bed is another reason to hold gold.

What ever happened to the happy medium?????
 
All good points but i want to also here peoples thoughts on what will happen when/if a sustained recovery eventuates. Sure if the US struggles for decades then House prices will reflect this.

But what if they and others fix there problems in the years ahead.
What happens after that ?
And how would it compare to Australia if we continues on our current trajectory.
Will one catch the other eventually.
Will Australia be more expensive for generations due to resources etc.
Will we slump and allow others to catch up.
Will we crash harder eventually and stay down for longer.

In a nutshell. The countries in trouble have house values to match.
But what about after a recovery. What happens to values then.

Cheers

For what its worth IV. I am very much a believer of averages as time tends to do this by default. Take the best case and the end of the world senario.
Its likely something around the middle will happen. Thats what i plan for but i also allow for the extremes. So im not expecting an iminent doubling of values for a long time. Im also not expecting a halving of values. Slow and steady in the short to medium term for me.
 
what recovery ///

oh we be fine in a world down turn ...got a funny feeling we wont and history is on my side

The Great Depression of the 1930s was an economic catastrophe that severely affected most nations of the world, and Australia was not immune. In fact, Australia, with its extreme dependence on exports, particularly primary products such as wool and wheat[1], is thought to have been one of the hardest-hit countries in the Western world along with Canada and Germany. Unemployment reached a record high of 29% in 1932[2], (although 32% has also been quoted[3] and gross domestic product declined by 10% between 1929 and 1931[4]). There were also incidents of civil unrest, particularly in Australia's largest city, Sydney[5].

http://en.wikipedia.org/wiki/Great_Depression_in_Australia

i suggest taking the time to read this and then looking for the truth
 
what recovery ///

oh we be fine in a world down turn ...got a funny feeling we wont and history is on my side

The Great Depression of the 1930s was an economic catastrophe that severely affected most nations of the world, and Australia was not immune. In fact, Australia, with its extreme dependence on exports, particularly primary products such as wool and wheat[1], is thought to have been one of the hardest-hit countries in the Western world along with Canada and Germany. Unemployment reached a record high of 29% in 1932[2], (although 32% has also been quoted[3] and gross domestic product declined by 10% between 1929 and 1931[4]). There were also incidents of civil unrest, particularly in Australia's largest city, Sydney[5].

http://en.wikipedia.org/wiki/Great_Depression_in_Australia

i suggest taking the time to read this and then looking for the truth

Ok. There is a chance of no recovery and the world is screwed. This gets discussed daily over and over. Im looking for different views.

IF. I repeat IF a recovery happens in troubled countries. how do we see their recovery taking place.
 
On a (resi) property front, the air I am smelling is of 1991/1992 and subsequent six/seven year period.

We will track sideways for some time (usual markets within markets caveat applies). Rents should rise modestly. I doubt rents will drop, however am not so bullish about great rent rises.
 
Ok. There is a chance of no recovery and the world is screwed. This gets discussed daily over and over. Im looking for different views.

IF. I repeat IF a recovery happens in troubled countries. how do we see their recovery taking place.

things will kick along to the next bubbles .

they been getting closer together and more intense

be prepared for no recovery is my best advise
 
what recovery ///

oh we be fine in a world down turn ...got a funny feeling we wont and history is on my side

The Great Depression of the 1930s was an economic catastrophe that severely affected most nations of the world, and Australia was not immune. In fact, Australia, with its extreme dependence on exports, particularly primary products such as wool and wheat[1], is thought to have been one of the hardest-hit countries in the Western world along with Canada and Germany. Unemployment reached a record high of 29% in 1932[2], (although 32% has also been quoted[3] and gross domestic product declined by 10% between 1929 and 1931[4]). There were also incidents of civil unrest, particularly in Australia's largest city, Sydney[5].

http://en.wikipedia.org/wiki/Great_Depression_in_Australia

i suggest taking the time to read this and then looking for the truth
That's the funny part about investing and you add the time factor you get too see properties go from 42k in one cycle,then 370k the next cycle,then above 700k,that is over a span of 24 years,so the question too ask yourself is,will the property that is now worth 700k be worth 1.5 mill plus in 24 years,I think it will what happens inbetween has no importance at all,that's what the risk factor is about,i still think prices will slow over a short period,then flat line again,every person i talk too in Business are not doing too well,that's the one item Team Rudd does not understand,once people stop spending it's very hard to make them open their wallets..willair..http://www.pbs.org/wgbh/americanexperience/films/crash/player/
 
On a (resi) property front, the air I am smelling is of 1991/1992 and subsequent six/seven year period.

We will track sideways for some time (usual markets within markets caveat applies). Rents should rise modestly. I doubt rents will drop, however am not so bullish about great rent rises.

Agreed. I'm not expecting much in the way of really big gains for another decade, but will use this time to continue accumulating quality assets.

Then when the next boom comes around (2020 - 2025?) I'll surf the wave into retirement.
 
Agreed. I'm not expecting much in the way of really big gains for another decade, but will use this time to continue accumulating quality assets.

Then when the next boom comes around (2020 - 2025?) I'll surf the wave into retirement.

Investing smartly and holding til we reach the other side will mean the difference between massive wealth creation or remaining in the rat race.
 
what recovery ///

oh we be fine in a world down turn ...got a funny feeling we wont and history is on my side

The Great Depression of the 1930s was an economic catastrophe that severely affected most nations of the world, and Australia was not immune. In fact, Australia, with its extreme dependence on exports, particularly primary products such as wool and wheat[1], is thought to have been one of the hardest-hit countries in the Western world along with Canada and Germany. Unemployment reached a record high of 29% in 1932[2], (although 32% has also been quoted[3] and gross domestic product declined by 10% between 1929 and 1931[4]). There were also incidents of civil unrest, particularly in Australia's largest city, Sydney[5].

http://en.wikipedia.org/wiki/Great_Depression_in_Australia

i suggest taking the time to read this and then looking for the truth

/delete/ban :rolleyes:

any reference to "similarities" between the 30s and now is useless.

period.
 
I believe that the Eurozone's weakness is being overblown, and that there are bigger problems elsewhere. The national debt and deficit in both the US and UK are much more serious.

At some point the markets will wake up to this.

Greece is being sold to us as a problem in Greece itself. The should just default but the banks can't permit this.

Greece owes some 236 Billion ($US) to the rest of the world. The Bank for International Settlements suggests that the Greek debt is owed mainly to the following banks:
French banks, 75 billion (32%), German banks 43 billion (19%), the US 7%, UK banks 6%, other banks in general, the remainder.

So if they default the banks won't get paid. The banks have a vested interest in talking down the situation to make it look worse than it actually is, to get State support. Remember that.

As for the markets waking up, the informed money will tell us soon enough. Just keep an eye out on the sharemarket chart and see where the next monthly low occurs. A low above the March '09 low will confirm that the worst of the GFC is over.
 
ha ha ha .

go follow my posts .. once again truth hurts ..

my investment looking strong yours and your lively hood looking shaky.

come on mate keep it polite.
Bluecard was expressing an opinion that he doesnt believe we will have a re-run of the 30's.
Your welcome to express why you think it will.

but no need to get personal about someones investments and lively hood.
 
come on mate keep it polite.
Bluecard was expressing an opinion that he doesnt believe we will have a re-run of the 30's.
Your welcome to express why you think it will.

but no need to get personal about someones investments and lively hood.

ok did you say the same when i been called a drunk etc . check where i posted

he posted for me to be banned with a :rolleyes: next to it thats pretty dam personal
 
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