There is nothing more deceptive than an obvious fact. ~Arthur Conan Doyle
Can I be excused once for committing heresy and posting fundamentalism on this brilliant technicians thread? Please just once?
I was reading a report on retail sale figures today; crux is Dec retail sale down .7%. Consider that was Xmass and with government stimulus. Things should be improving now, shouldn't they?
With this in mind, tonight I visited a waterfront high density living precinct just north of Brisbane. Two of the new large high rise buildings have already gone into receivership. The Coffee shop next to them said hardly anyone lives in either building and the real-estate agent recently gave up trying to sell on-site. I would estimate only 5% of either building has lights on and it was evident almost every unit was empty. The buildings were completed over a year ago, and I would classify them as upper end. Another large building (targeting low end) just up the road is almost completed offering small units starting from 550. A local real estate agent (I had to press him with some determination) told me he had sold none of the almost completed building. Oh dear, it reminded me of my last trip to California 7 weeks ago.
So now Im perplexed. Will housing be the catalyst for a major correction here? I know mortgage repayments are at historic highs as % of income. Than again, if employment holds, perhaps there could be no correction and inflation could do the job to bring sanity back to prices.
Australia the most overvalued housing on the planet! http://www.fcpp.org/files/1/gdhi-final.pdf
It makes sense that high prices will result in lower standard of living for future generations as a larger % of income is appropriated to mortgage payments instead of spending in the economy. I own my house and I have no rentals. I therefore couldnt care if its worth 900 or crashes to 450 as its still the same house and Im not selling. Hence I think Im unbiased.
Fujitsu consulting found mortgage stress is increasing, severely stressed just 7% last month.
http://www.cecaust.com.au/ watch this vid featuring Lyndon LaRouche talking about this bubble.
I know we have many smart cookies on this forum (Volt, Robbbb, Redbacker, ninelives, Pj, Haspete etc.) So enlighten ones am I missing something, am I blinded by some prejudice??? What happens if the RBA keeps rates below real inflation in an attempt to keep the bubble from popping? What happens when Kevin07 cant keep the bubble going with stimulus??
(20min delay)