australian housing - is it a bubble?.., page-4

Let me just say at the outset RT I'm not trying to shoot the messenger, however I see the talk of a bubble being somewhat if not completely irrelevant.

Essentially the charts/graphs shown in the article you made reference to, paint a fairly obvious picture of where the price of housing in Australia is heading, bubble or no bubble.
Take for example the graph depicting the long term housing trend - it is more or less a forgone conclusion that prices will come back to trend as they did during the 1920/30's and again during the 1960/70's.

Talk of there being an undersupply of housing is in my view just one of a number of propaganda components used to further stimulate 'necessary' housing growth.

The music has stopped folks and there's a limited number of chairs available, well there was. NOT NOW THOUGH!

Seems to me that an increased number of residential property owners are presently attempting to cash in on their 'wealth' by selling the asset. Trouble is everyone (just like sheep) is having the same thought, who would have thought that mainstream society would behanve like sheep ;)

Once one person is willing to accept a lower sale price this will likely trigger a cascade effect particularly in light of the fact that some who've held property for the longer term have more room to move in realising a profit from their investment.

Ultimately if properties are selling then prices must come down, it comes back to supply and demand!

From the article by Shane Oliver;

'Most of the increase in mortgage debt over the last few decades went to older and wealthier Australians'.

These baby-boomers will undoubtedly want to cash in on their investments and potentially flood the market with residential properties in coming years. Trouble is as I alluded to above, they have room to drop their prices, yes they will reduce their profit but they will also reduce their capital gains obligation in the process. Unless the property is held inside a SMSF, but that's a story for another day ;)

WC8