housing survey, page-15

Molonski,

Last time a broker told me rates won't get to 8% was in April 2006...

Now they are at 8.65%. Only 1.35% left till 10%. There will be at least another two rates rises this year by the RBA alone which will mean that rates will get to 9.2%. That's without the banks increasing their rates outside the RBA cycle.

What makes you think that even at 10% it won't affect demand and supply??

BIS Shrapnel predicts a housing slump in 2009. They have said that rates will be 10% by then which will cause a housing downturn...

Fat Prophets have recommended to avoid buying shares in banks for the next 5 Years!!! Marc Faber (Who has predicted every downturn) has said that the US might default on its large debt.

We had a housing boom, prices increased too much too quickly. Housing is out of sync with average incomes. Majority of rental returns (Yields) are still less than 5-8% P/A ...

What don't people understand??? Are we waiting for the average house to be worth 1 million dollars while people are only going to be earning 50-80K???

Lets be abit realistic about things.

I'm not saying that people should sell. Only saying that people should not expect property to perform the way it has in the past. It will be flat for a while and could even go backwards in ceratin areas. Don't know about Melbourne but in Sydney property is starting to look really sick (Except in the eastern suburbs).