"What is the trigger for all this to unravel?"
The trigger could be a slowdown in resource industry. That may in turn lead lead to:
-> lower government revenues
-> cuts in subsidies and tax breaks related to housing and banks
-> broader cuts to government spending and higher taxes
-> higher unemployment
-> higher bank lending standards
-> domestic pressure to reduce immigration intake and less demand from migrants
->lower AUD -> higher foreign debt servicing -> reduced bank funding availability and higher costs
There are lots of nasty negative feedback loops as we saw in the GFC. Its a bit early to be calling all this yet imo but no reason for complacency. We've dodged one bullet and seem to be getting a little over-confident. The government is not so well positioned to come to the rescue if there was a second aftershock.
- Forums
- ASX - General
- australian housing bubble about to burst
australian housing bubble about to burst, page-28
-
-
- There are more pages in this discussion • 15 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)