Anyone who believes the myth Property prices goes up forever, for what ever reason, ie growing population, growing migration, is taking a rather ignorant skewered view. Unfortunately the myth has been propped up by negative gearing, the first home buyers grant, and easy money from the banks in better times. PR companies on news sites and economists have acted as fronts for the banks, telling the sheeple, a home ownership investment is the best form of investment you can make. This is wrong, and anyone who believes in the property myth should read Niall Ferguson's (Harvard Professor) the Ascent of Money A Financial History of the world, Chapter 5 Safe as Houses. He examines the great property boom and bust property story around the world, and looks at Japan's Property bust of early 1990's, when prices escalated to record levels, and then deflated to record low pricing. Ever since this happened, the property market has never since recovered . In Australia, we have now an interesting situation, record levels of high Household debt running at 120% of GDP, a tightening of lending by the banks, and lower consumer spending. We also have higher inflation, where prices have escalated for things such as fuel, food, electricity, council rates putting cost pressure on family budgets. Wages are not necessarily growing, and there is a lot of uncertainty in the economy. Clearance rates are dropping, and you should see how many houses are up for sale on the Northern Beaches of Sydney.. There may be some bargains around in the next few years, as more and more people are forced to sell. Housing in Europe, is so much more affordable than this country, that is for sure.. The Great Crash is coming.
