I am happy to sit on the sidelines at the moment. I am not sure when I will buy again. Definitely not this year. Australia is trailing the US (2 yrs behind) and UK (9 mths behind) with its stimulus packages and property price falls
For reasons I have stated in this thread I dont think property is a good investment right now.
As I said to booz, I think its great to do research on the specifics of the property market but at times like these it is crazy not to look beyond Australian shores.
CREDIT IS THE SINGLE MOST IMPORTANT DRIVER OF PROPERTY PRICES. Property prices rise while banks provide ever increasing credit to less worthy applicants. They fall when banks pull back from providing credit as they scramble to support there balance sheets and take a more conservative approach.
Our source of credit to drive this boom was not 100% local. The majority of money came from overseas, predominantly the USA. The banks that were lending to fuel the boom have stopped lending to all but the most credit worthy. Our government is stepping in to buy MBS (mortgage backed securities) to support lending in Australia
CREDIT SUPPLY, not specifics of markets, I believe this is the key to house prices rising in the past 10 years and it will be the key to falling prices.
