Don't expect the brakes applied any time soon

[see_change]

Treasurer Joe Hockey told reporters in Canberra that he was not worried about a housing bubble and rising prices should help generate new construction.

The most important point at this stage is that there is confidence back in the real estate market in Australia,Mr Hockey said.

Rising house prices actually help to make marginal property development viable. And there is a shortage of supply out there and what this will do is make supply more readily available.

Mr Abbott also welcomed rising property prices.

Don?t forget . if housing prices go up, sure that makes it harder to get into the market, but it also means that everyone who is in the market has a more valuable asset, he said

I would be confident that the Reserve has got its eye on housing prices and will appropriately manage the level of interest rates.

One aspect to think about is that the Government will be relying on increasing property prices to boost the economy , peoples confidence wealth & spending will go up . The government aren't going to cut the deficit by cutting spending , but by increased income. The property industry is a prime mover in the economy .

There are more people in the market , than trying to get in .....

Cliff

 

[MarkB]

One aspect to think about is that the Government will be relying on increasing property prices to boost the economy , peoples confidence wealth & spending will go up . The government aren't going to cut the deficit by cutting spending , but by increased income. The property industry is a prime mover in the economy .

After I push enter on this post I am off to throw a bucket of cold water over my head, because at some level I agree with my good friend.

It's a brilliant tactic on the part of the government to let the housing market run wild for a bit.... as Seech mentions it will help boost income for the government.

It is, after all, far better that increased levels of indebtedness sit on private balance sheets rather than public ones.

Or is it....?

Hockey said this:

I would be confident that the Reserve has got its eye on housing prices and will appropriately manage the level of interest rates

Which is ultimately an admission that while the government might not give a fig about the property market running wild in the near future, the pointy-headed-retards at the RBA might.

And those guys [the RBA] aren't up for re-election in 3 years....

Now if you'll excuse me.... I have to wash my hair

[Beware how things play out in the US though....]

 

[see_change]

Two other thoughts

People already in the market are more likely to vote Liberal .....

I wonder whether private investors will be more responsible with their Debt than Politicians . If we get it wrong we go bankrupt .

If they get it wrong they get booted out of office ... eventually ... and then blame the other side

Cliff

 

[Piston Broke]

The only thing worse than inflation is deflation.
As in Japan for over 20yrs and US/EU/UK the last 5/6.
We have had relatively mild deflation last 2-3 yrs but unless the rest of the world picks up, I doubt we will either.