Countries printing money, some fixing a ceiling to their exchange rates with interest rates at near all time lows for many many countries.
Seems like a race to the bottom. Essentially it is, those with the lower exchange rates get a larger slice of the trade exchange pie.
If rates are at all time lows here, why aren't buyers just snapping them up? These cheaper than renting properties? It's because the Australian market is exhausted.
1) First time buyers - exhausted? Why? FHOG. It brought demand forward it did not create demand. There are a finite number of first time buyers.
2) Investors don't have the abilty to borrow again. Exhausted? Why? To borrow cash for property you need income or cash flow and security position. Essentially the 2008 to 2012 returns for property has gone full circle - no property growth. Investors have the means to borrow, but not the ever increasing equity position they once had. An investor borrowing 80 or 90 or 100% of the property value throughout the last 4 years has not increased their equity position. An investors equity position is the same. Therefore they are NOT in the position to go again for some time.
First home buyers are down and out for a few years. Investors are on the sidelines taking a break. If property values hold, they will be back in a few years when they have naturally saved the deposit they need for the next property, but not yet.
