I still look at property for sale and have watched list prices come back considerably here in Brisbane. I see stuff sell very quickly sometimes if its priced below the former market and I have to catch myself when I start to think "bargain"....
What is a bargain at the moment - 20% less than the peak? Take 80K off the price of an average $400K house? That takes us back to the end of 2006/ beginning of 2007 in Brisbane. Are 2007 prices a bargain? or are 2004 prices a bargain?
In Dec 2004, I bought a house 10km from Brisbane CBD on land with full city views (views not obvious at the time) for less then $320K. Would that be a bargain today? Its only 4 years ago....
On a yield basis prices 20% below peak are becoming more acceptable with interest rates at emergency settings but is it a bargain? and should we be calculating property yields based on current emergency interest rate settings?
I don't believe inflation has gone away - just resting for a while. Remember our dollar is 30% down from peak and Asian imports paid for in US dollars will cost considerably more.
When inflation returns will Central Banks be forced to raise rates again in economically difficult times?
I don't want to argue - just think worth stepping back and looking at the big picture to help make good decisions
