I tell you one thing, you've got to give credit to the persistence and blind sightedness of the property bulls on this forum.
Anyone who thinks that immigration will be the saving grace for the Australian property market does not understand the reasoning behind the governments large intakes per year when clearly we do not have the infrastructure to support it.
Ive said it before and i'll say it again, the government takes in these immigrants because they offer cheap labour when compared to the existing born/raised and educated labour pool in this country. What this does is it caps inflation levels which in turn prevents a wage price outbreak when conditions in the domestic economy are tight, which they have been over the past 5 years. I would not be surprised to see the immigration intake actually fall over the next few years as the competition for jobs within the Australian labour markets heats up. If the Government continues to take in these record numbers of immigrants they will be competing against the existing labour pool for jobs which are expected to fall over the next few years. What happens if these immigrants cannot find work? They rely on the government for handouts and hence do not have the income nor money to support the already over inflated property prices as well as rents in Australia. So if the government are tipping less tax revenue and more budget expenditure to support these groups, what other choice does the government have but to reduce immigration levels.
The IMF have stated previously that property prices are 25% above fundamentals and with availability and willingness of financial institutions to lend at an all time low, where will be the demand to support asset price growth in Australian property? Some may argue that interest rates are coming down and this will spur demand, don't forget that the property market it driven by emotion as well and with the uncertainty at the moment with the state of the global financial system, many people will put off buying property until things start to stabilise.
It is obvious from the developments in the foreign exchange/bond markets/commodity markets and to a lesser extent the equities market, all factors are pointing to a global slowdown in which Australia is neither immune or removed from, no matter what anyone says.
As clear as night follows day, if Australia enters a recession the property market is the next to follow.
