lets not forget the 10 bil in cash arriving in the next week, and tax cuts next year, increased infrastructure spending, falling price of fuel. Surely we will be alright. And if not well what more could have been done?
I don't know which planet some of these wishful thinkers are from.
But it's fanciful to think that little old OZ can keep it's hugely inflated house prices intact in the midst of this global meltdown - or that any thinking person would even want that to happen.
Now perhaps our house prices can defy gravity for a while and we can keep prices 50% above their natural level - while the US and the UK revert to normal - but just think about this question.
"Why would anyone buy houses in OZ as opposed to the US and UK in that situation"?
Either prices remain high and demand stays low - or vice versa.
Be careful what you wish for - and look to Japan for an example of how it all actually works.
I know that Avril and Arthur Average are not yet plugged into the information superhighway but surely they can count and add up!
House prices are crazy- and as someone looking to purchase their first one i'm happy that prices have fallen.
But to answer your question "Why would anyone buy houses in OZ as opposed to the US and UK in that situation"? How about because I live here and have a job here? and with record high population growth, low unemployment, and a undersupply of housing(or so they keep saying) I think the best I can hope for is a few percent further fall and prices stagnating for a while.
but i'll guess we will all see what happens! I'm happy to sit back a wait for a bit.
This massive reduction in interest rates signals that the RBA is seeing a very significant slow down in economic activity.
This means, the Australian economy will be joining with the rest of the world into a significant and deep recession.
When massive retrenchments start to occur next year, then house prices will come crashing down.
Unfortunately, for some, who think that this is good news, you are going to get a really big shock in the not to distant future, especially if you up to your gills in debt.
I refer to my previous comment on https://www.blogger.com/comment.g?blogID=3747603&postID=3344978254759269463&isPopup=true as to why this is looking really really bad.
12 comments:
Those keen pundits predicting collapsing house prices possibly havent factored in these decisive cuts by the RBA.
From where I set they are doing a sterling job and should and will keep cutting in the new year if necessary.
Puts a floor under house prices and ensures the economy weathers this period of turbulence.
Nick
lets not forget the 10 bil in cash arriving in the next week, and tax cuts next year, increased infrastructure spending, falling price of fuel. Surely we will be alright. And if not well what more could have been done?
lol Nick and Marek
Banks won't necessarily lower their rates if the RBA does. Our banks borrow around 40% of their money from overseas. Consider that.
But in the short-term, things will look good. It'll be time to be smug from now until Mark-May when it all starts to crumble again.
Hope you have a stable job...
Agreed anon, how will house prices crash when the govt is all out to prop up the bubble?
Anyway, only 4.25% to go to zero.
Party-time.
I don't know which planet some of these wishful thinkers are from.
But it's fanciful to think that little old OZ can keep it's hugely inflated house prices intact in the midst of this global meltdown - or that any thinking person would even want that to happen.
Now perhaps our house prices can defy gravity for a while and we can keep prices 50% above their natural level - while the US and the UK revert to normal - but just think about this question.
"Why would anyone buy houses in OZ as opposed to the US and UK in that situation"?
Either prices remain high and demand stays low - or vice versa.
Be careful what you wish for - and look to Japan for an example of how it all actually works.
I know that Avril and Arthur Average are not yet plugged into the information superhighway but surely they can count and add up!
On the other hand - perhaps not.
House prices are crazy- and as someone looking to purchase their first one i'm happy that prices have fallen.
But to answer your question
"Why would anyone buy houses in OZ as opposed to the US and UK in that situation"?
How about because I live here and have a job here?
and with record high population growth, low unemployment, and a undersupply of housing(or so they keep saying) I think the best I can hope for is a few percent further fall and prices stagnating for a while.
but i'll guess we will all see what happens! I'm happy to sit back a wait for a bit.
The problem now is deflation.
Debt typically does poor in deflation.
Check the money supply aggregates from the RBA. That'll tell you what they're trying to do.
Yes Peter, the chart is evocative, but of what? House prices? Growth? Everything?
I guess this shows that the Rudd Government is a low interest rate government. Yawn. . .
I think it is fairly obvious at this point that money will have to get cheaper to provide the same recession-avoiding stimulus it did in 2001.
What happens next? How restrained will the RBA be when they need to raise?
I don't think Australia should be celebrating rate cuts.
Well said, Nicholas.
This is not at all party time.
This massive reduction in interest rates signals that the RBA is seeing a very significant slow down in economic activity.
This means, the Australian economy will be joining with the rest of the world into a significant and deep recession.
When massive retrenchments start to occur next year, then house prices will come crashing down.
Unfortunately, for some, who think that this is good news, you are going to get a really big shock in the not to distant future, especially if you up to your gills in debt.
I refer to my previous comment on https://www.blogger.com/comment.g?blogID=3747603&postID=3344978254759269463&isPopup=true as to why this is looking really really bad.
Post a Comment