Swan is a complete tard. He acts as though having the lowest interest rates in the nation's history is a desirable thing when in fact is is a symptom of severe structural damage to the economy caused by his incompetence and corruption. I use that word because I regard his placing of union agendas before the national interest as corruption.
Didn't USA have near zero percent interest for a while? Does anyone know if that boosted real estate prices?
If memory serves RE prices started to collapse in 2007. I could be wrong on exact timing. I think it has as much to do with the credit cycle as with rates and that's why Aussie prices have survived another credit cycle. I fully expect rates at 0 here at some point, but I think that will be after a financial and banking crisis in this country. Some people have said there has been a bit of a boost again to RE in the last few years in the US. EDIT: clarificaation
I'm sure I've read somewhere in the last few days that RE prices have stabilised or increased, but for the life of me I can't find a reference. I'm thinking it was in a "Casey Research" article.
The only thing that funds housing prices is the availability of credit. For instance, there has been a lift in housing prices this year because banks could off set the risks of making loans by re-commencing the sale of CDO's for their mortgage portfolios. This increase in demand for these mortgage backed instruments was due to investor money seeking greater yield, investor money was seeking greater yield due to low interest rates. The ability to sell their CDOs let banks issue more housing related debt, making credit more available and lifting house prices. If there is more demand for bank CDOs from investment funds and the like, expect lower lending standards, more willing mortgagees piling on debt and house prices to rise. If investment funds feel the CDOs are too risky, as per the sub-prime crisis in the USA, and seek yield elsewhere then banks will not be able to on-sell their risk, will not be able to lower lending standards, home loans will not increase and house prices will not rise. see: http://www.brw.com.au/p/business/competition_from_banking_dead_residential_tcq14G2SNkevFUgqD6qEzL Notice any correlation with house price growth?
You could say it did in parts but easily arguable that it was because the downside was overshot when the bubble collapsed.
Our taxes are unbelievably high! If we started getting inflation - we would be wipped out. Australia needs to go on a massive taxcut-o-rama We SHOULD be booming - but we are rolling over under the massive miss-spending of the government and the subsequent high taxes to pay for it. Everyone is paying back their mortgages with MORE valuable dollars than when the mortgage was started. Massive wealth transfer from the Australian people to the Australian banks and the Australian government. Our government is pretending to have no money - they have access to BILLIONS of dollars - they are MASSIVELY over committing as an excuse to increase taxes!!!!!!
Severe strucural damage for sure..... I'm a courier and drive all over Melbourne everyday..... Lately I have been staggered at the amounts of small business factories and buildings being closed with 'For Lease' signs out the front..... Some factories in the western suburbs are massive and they're either closing down soon or are already desolate with doors locked and windows guarded.... Its really scary to see..
So you're saying Australia is behind the times? I have to agree with you there brother. And it shall come to pass. I was always scared of that word "shall". Christians view it like the word "hope". In their language "hope" is not a maybe, it's a certainty. In much the same way as "shall".
you probably find that there is still a lot of hot money coming into australia and buying up all of the houses...especially from cash rich chinese/asian..
