Just about every Australian who's either in or heading into retirement will be feeling much less wealthy than what they were expecting to be at this point of time. How their super funds performs is critical to their long term plans. Many have seen 30 to 45% wiped from their portfolios, so it would be of no surprise that some form of liquidation will be needed. Holiday homes could well be the first on the list, as the income generated from the sale of these homes will be a godsend (as against the constant liability of an empty holiday shack). So far Australia appears to be riding it well, but for how much longer? If Australians can repay their mortgages then why sell? Where I see things to be critical are the following. Our economy must have a constant supply of credit to maintain its upkeep. In doing so retail spending will continue and employment losses will be minimal. Providing credit flows well and people don't feel too poor then maybe, just maybe we'll avoid a housing crash. Where we could also come undone is that the influx of migrants are now competing with the locals for jobs and social security benefits. When or if unemployment rises to recession levels then these extra immigrants will go from being assets to total liabilities. For now the tension is high - it's like some horror movie where one is being stalked by a disfigured predator. We're all seeking that typically happy American ending - lol.
