- Turnover on Australian property in 2010 was over $300 billion. That seems like a bubble to me.
- The average price is seven to eight times average wages vs historically being three to four times the average wage. To all the fools who talk about 15% + rates in the past.....it's actually cheaper to pay off a house that's three times your wage at 15%+ than it is to pay one off thats seven/eight times your wage at 8%.....but keep up the ignorance!!!!
- Mortgage repayments as a % of H/H exopenditure are higher than they have ever been, meaining even slight rises in interest rates have dramatic effects----> like average folk spitting on bank employees.
- Having said all that...NOT ALL BUBBLES BURST. We may just see a long period of zero growth (negative real growth) for a long period of time.....like Japan.
There is something that "COULD" happen that would burst this bubble just around the corner. There has been massive surge in money supply since Sept 2008 thanks to the printing presses over at the fed. Although it has helped to support prices, the surge in money supply could prove to be highly inflationary. Rising prices (especially food) will give the RBA no choice but to raise rates. Couple this with any problems in China with their own bubble and you may just see a retreat 30-40%.
