We are turtled. And there's no turning back now. From the article below: "It's a bleak picture of an economy with only one lever of growth and it feels a lot like the United States before the sub-prime debt problems, which caused the GFC. That is, the RBA policy is implicitly borrowing growth from the future to plug a hole in the present. But in doing so the Australian economy is becoming dangerously overburdened with household debt." Things are only going to get worse. From Business Insider:
Steve Keen has been harping on about this for ages and ages. Seriously attend an auction and note the number of Chinese. There's about 30 million Chinese wanting to get into the country at the moment. 30 million, just astonishing. And they have money! Government was asking them to put 1 million into "waratah" bonds program and buy a house to qualify. Guess what? They did and have been. You know which area I live in Sydney and I can tell you this, there are so many Chinese here and none of them speak any English, none. Many drive really nice cars too. Just drive around Burwood and ask locals how the area has changed in the last 5 years. So I have my doubts. There are just too many of them if the government opens up their quotas. I am aware that the government is reducing a lot of immigration at the moment. They expand it and contract it depending on the economic environment a lot better over the last few years. So although I don't disagree that there is a MASSIVE bubble, the question is "how long can it be sustained?", my guess is it will pop but who knows when and people have been saying that for 20years already!!!!
We've turned housing into a global investment vehicle. It could go on for quite a while yet with locals having to borrow increasing amounts to even have the slimmest chance of competing with the global money pool.
You'll need to try harder than that. $60 of debt wont even buy you one brick in the latest real estate brick-by-brick investment scheme. You'll need at least $66 to get your foot in the door.
Take note all blue and red supporters...Notice the HH debt as a % of GDP from 1999 to 2015...It just keeps going up while the Politicians keep telling us we are getting richer. What happens when the savers get 0% on their savings? There is nothing left to stimulate the housing led economy. Austerity is not the answer... IMO lift the GST to 15%, raise the petrol tax while the price of oil is down, cancel the F35 order and buy off the shelf. Reduce the immigration numbers by half for the next few years..This might reduce the demand for houses.. Australia should act now(next budget) while we still have a chance to dig ourselves out of a hole. The HH debt is not government debt so why do government MP's remain silent?\ Regards Errol 43
The stock market will boom with punters chasing divs of any size, and we will continue to believe we are rich? Bollocks to that.
I'm never in favor of raising taxes. In the US, it's sickening. The government takes our money, cant account for half of it, then dishes the rest out to their friends and political allies. We'd be far better off keeping our money and injecting it straight into the economy.
Top chart....How has US HH debt to GDP decreased since 2008 when debt during that period increased 8 trillion? GDP would had to have had huge increases. Pretty sure it has not.
I've been doing small developments around the Burwood/ Box Hill area for the last two decades and have been staggered by the influx of Sino money the last few years. It's is almost impossible to buy a property at the moment at auction without paying well over the odds. Since the AUD has dropped recently the intensity has only been exacerbated. I never thought it would happen but I've been priced out of the market.
