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Cuts in the public service in past governments have meant some long flat periods in the Canberra service. However, cuts have not had as much of a severe effect in more recent years, as the local economy has expanded, and the community is less dependant on that single employer.If a housing market is very dependant on a few major employers and the major employers pull out then the effect can be drastic. Like Canberra a few years ago.
Michael yardney
When property crashed in the early 90s, what % drops did we see from the peak in '89?
I'll see you at the seminar this Saturday(Sydney).
Rob
Rob It depended where. Victoria bore the brunt of that proeprty downturn and in particular the upper end of the market.
There were many properties taken over by the banks as mortgagees and some upper end properties fell by over 20% in value - I know my house did, but as I didn't have to sell it I rode through the downturn. It took 5 - 6 years for some proeprties to regain the value they lost.
By the way - please come up and say hello on Saturday
1) recession
3) loss of consumer confidence
4) high interest rates
6) tightening credit
Ausprop said:many of which are looming now i.e. 1,3,4 and particularly 6
The factors that could cause a property crash are just not there.
Ausprop,
Be interested to hear why you think these things are looming. Other than 4 which is evident (though I wouldn't call 7.4% high). What is your reasoning behind 1, 3 and 6.
I hear a lot about 1 and how we're overdue but I see no real sign of it actually happening. Seems to be a gut feel thing for many?
Just curious as there seems to be a very split view on the current state of things. I notice also that you're in WA and wonder if the state of the market of the market there has led you to the above statement.
Cheers,
Arkay.
Hi Michael,
I'd be interested if you could share your views on whether you believe we will see a large market correction or a recession in the short to medium term (say next 10 years).
I can understand the rationale behind the expectation of a recession and some of the comments being made. Problems in the US. Potential for a change of Government. Potential for credit tightening. The so called Housing Crisis. The level of the stock market considering that stocks vs property are generally counter cyclical etc.
Seems there are a myriad of reasons that can be given as to why now is a bad time to invest in property yet to me seeing what *IS* happening coupled with the supply vs demand statistics we really are just in the upturn phase and there is some way to go yet before we get to boom times.
Is their any potential that recession, unemployment, credit squeeze etc could happen at a rate fast enough to stop the current cycle in it's tracks?
Do you believe their could be a huge crash after this next boom? Given the run property has seen over the past ten years and that we're also seeing it start to run again now, I can see how some could be convinced that "this just can't last"?
I agree that at present there don't seem to be any signs pointing toward a property crash other than an "it seems to be overdue" sentiment.
Cheers,
Arkay.
There are just too many variables to predict, but what I have shown in detail in my book How to grow a Multi Million Dollar Property Portfolio - in your spare time is the explantion why our next boom will be our biggest one.
It really all boils down to supply and demand - ageing population, different demographics, strong immigration, stable economy and government, increasing cost of producing housing and shortage of supply.