I don't think the world economy has recovered, but try telling Australia that. What was the impact here of the GFC? Initially, about 6 months of uncertainty with minor drops in the price of housing and a minor and temporary employment drop. Now we are at new highs due to government handouts.
If things continue as they currently are, I think 1% is a sure thing. If the cracks widen in recent events with China pulling back on their spending and worldwide debt causes a further tightening of credit, that could reduce the need to raise them. If that is the case though, I believe a double dip recession is likely....if not depression.
What would you prefer? Either way, housing cant sustain current levels for long.
Mika, you are still right on your statement of housing going up in the long run, but for people wanting to buy now, what would you tell them? Do you have an opinion about short to medium term prices and their direction?
