"the rba raised interest rates too fast, too soon, too high... retailers are looking at probably the worst figures in two decades....that says a lot, a huge statement from the people,"
Exactly we have been on a debt binge for too long and then continued the binge with emergency low interest rates thinking it would last for the longer term. We are having a typical boom/bust cycle. Australia is no different to the rest of the world. Australia will have one massive property hangover and real evidence will begin to show after Q1 2011.
"rates will either stay on hold, or start dropping...."
Doubtful. We have a booming mining sector that will see the rates slowly rise throughout the second half of 2011. Property bulls need to accept that the ultra low interest rates that allowed 'suckers' to borrow even more in the great Australian ponzi finance scheme (aka residential property) is over. The days of $500-$600k for a inner-city rat's nest will be nothing but a dream.
"the govnuts will panick, and you may see a bigger FHB grant...the states who pick up the stamp duty are panicking....and in total dissaray....."
Another large FHB is not the answer, the government needs to accept the policy mistakes it has done in creating an unafforable housing bubble, not keep it alive. Although a significant conflict of interest exists with all the revenue from stamp duty :(
FHB and negative gearing need to be adjusted in accordance with the rest of the world. Residential housing being treated as tradable commodities is what caused the financial meltdown throughout the rest of the world. Australia is no different and we are yet to learn our lesson. This day is coming.
"for those of you who have followed my posts over the years...nothing recently, has changed my view....I look to the long term, and I see it as sound..."
Long term.... You should consider the opportunity cost and make appropriate adjustments to your investments. Holding highly geared assets knowingly they will fall 10-20% or stagnate at best is not a sound investment plan.
