Just for the record a number of property positives on this site predicted a drop in rates - Warnie referred to that in one of his posts and I think we all deserve a pat on the back for that although Blind Freddie could see that coming.
Now there is talk of further drops this year because the GDP figures are down - well duh they are going to keep going down for a while now because after the fact statistical prognosis of the economy does not work.Watch them keep dropping for a while.
Regarding property it will move sideways for a while and affordability will improve. Firstly because rates drop, secondly because of wage inflation and thirdly because there will be some paring back on values. One way or another seen this 5 to 6 times now here and overseas and been real estate all that time.
Affordability issues will not go away - houses only become affordable after you commit. You do your homework, buy well in good areas , lock in your motrgage and 5 years time it becomes affordable. Reason - mortgage pegged - you can plan your life and equity climbs.
Anyone who believes affordability will improve by houses dropping significantlyin value in Australia is living in FANTASY land. Now is your chance , next window of opportunity, if you think they cost a lot today , 5 - 10 years time will be nose bleed stuff relative to today.
When you buy , you have to be selective , avoid regional like the plague because well situate property in the right capitals will do well for the medium term. Country towns are dying ie Euroa - main ind about to close, if not rescued many out of work and off they go -hello ghost town. This is going to repeat itself all over non resource towns in this lovely land.
These points are basic and as with the RBA any decision made on purely statistical data without reading trends, past patterns and intuitive ability is purely investing after the fact - do your research but buy soon - avoid the HC speccie stock mentality - that makes as many people rich as would playing Powerball.
