Stevens is very aware of our housing bubble
what housing bubble? things must be very different where you live in oz
actually I see you are in Vic which may explain that
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Stevens is very aware of our housing bubble
what housing bubble? things must be very different where you live in oz
actually I see you are in Vic which may explain that
There's no bubble in Vic!
ok, I had the idea that it had risen during the GFC and defied all odds and hadn't really dropped yet. For us mere mortals out in the likes of qld and WA a lot of our stock has already dropped a good 20-50% so its hard to know if the doomsday prophets are including already savaged stock in their forecasts. For a property that was $2m a few years back to go to $400k seems like a stretch. anybody would pick up a beachfront property for that price becuase it would only be 3 x income. 1.5 times if 2 people were working. thats if they have a job. seems jobs are the key. UE is on the way up but I cant see this going nuts in the short timefram Dent is talkign about
The availability of credit seems to be the key contributor from what I have seen. If credit markets freeze and Australian banks can't borrow internationally to keep the bubble propped up, a crash would be sudden and severe.
I was at a seminar at the weekend where Rick Otton was talking about the opportunities available during the savings and loan crisis in the US. Because there were no banks lending money during the crisis, you could only buy with cash. He was saying that prices literally dropped by 95%. You could buy a nice 3 bed house for $600, just 20 odd years ago.
The same has happened in Florida this time around with 80-90% price drops as banks are holding onto cash, instead of lending it.
The whole housing bubble in Australia has been formed on loose credit, as it was in US, UK etc. When the tap is turned off, housing markets must deflate.
What your saying there's no WA bubble , WA's one of the scariest bubbles if you ask me in the country, apart from QLD .
And yep Vics got one too obviously after their last run.
JMO.
the US also have a construction mantra of "build it and they will come", massive oversupply is a key factor for such large drops.
the US also have a construction mantra of "build it and they will come", massive oversupply is a key factor for such large drops.
Whereas in Australia it's 'I won't build it until I have pre-sold all of my units'
their 'think big' approach is admirable IMO. aussies are so dam conservative
The whole housing bubble in Australia has been formed on loose credit, as it was in US, UK etc. When the tap is turned off, housing markets must deflate.
The whole housing bubble in Australia has been formed on loose credit, as it was in US, UK etc. When the tap is turned off, housing markets must deflate.
so if the US has crashed and UK and Aus hasn't, then why? what was going to happen has happened.
I too am looking for soem of this loose credit here in Aus - where can I get some?
Now we have the 'responsible lending' laws so it is harder for things to get out of control in terms of residential lending......
What your saying there's no WA bubble , WA's one of the scariest bubbles if you ask me in the country, apart from QLD .
And yep Vics got one too obviously after their last run.
JMO.
here's a bull....
http://www.businessspectator.com.au...-rates--pd20110915-LQ3H3?OpenDocument&src=pmm
" it is plausible that Australia’s currently soft housing market will emerge as a relative winner from any global fallout"
Chris Joye was calling for more interest rate rises only recently while simualtaneously arguing that residential property had good growth prospects. Now he's arguing that property will also be a relative winner if lower interest rates are brought on by an economic downturn. You'd almost think that he had a vested interest in pushing property investment regardless of the fundamentals.