You are dreaming UT if you don't think we have a bubble here.
The 60 minutes story was spot on. One thing that the likes of you and the other property barons on this site do not have any real sense of - and that is the cost to service the mortgage of the 'average' house in Australia. Why do you guys have no idea? Because when you kicked off your property portfolio, houses could be bought for quite reasonable prices - sometimes even cheap (2-3 X average income).
I don't know how many times I have made this point - It is really very obvious - but when it costs 5-6 X average income to buy a house there is a really really serious problem. It is an economy wide problem that will only be solved if house prices drop like a stone in the next year or so.
Sustained house price costs at these levels:
- reduce discretionary spending (retail and domestic tourism in the toilet - ring any bells?!) - reduce the pool of capital for other investment in the economy (starting small businesses etc) - cause family breakdowns
By the way, have been doing some research and have figured out if I keep renting, I will be able to retire to the US in 10 years (where house prices are 1/3 the cost of my city - saving me 10 yrs of working). I figure that is a much better option than signing on to the collective insanity of the Aussie bubble-deniars!
