echoes of 1990 recession at the door , page-13

I do agree that your postulated scenario is quite possible n5435137.

But this low inflation or deflationary environment would also result in zero benefit regarding inflation effectively reducing borrowings over time. For eg if you borrow 1 mil today interest only, at 3%PA inflation, in real terms it may only be the equivalent of half that 20 years later. If no inflation, you have still owing 1 million 20 years later in real terms.

The other argument is that given enough QE or money printing, if the Euro and even Australia has to resort to this, eventually this may result in a decent inflation breakout in what may continue to be sick economies, that are not fostering property asset price growth.

Ultimately, property in Australia compared to historical prices, is just coming off a high and by whatever mechanism, I think it will become more affordable, by prices falling, or just going nowhere in actual dollars for 10 to 20 years which if there is any inflation or wages growth at all, is effectively a loss in real terms.