You are the troll you moron. I started this thread with the topic of discussion being the Australian property bubble. Think about it.
a troll is a person who sows ** on the Internet by starting arguments or upsetting people,[1] by posting inflammatory,[2]extraneous, or off-topic messages in an online community with the deliberate intent of provoking readers into an emotional response[3] or of otherwise disrupting normal on-topic discussion.[4]
Why in the hell can you claim to read Tcb's links but are too lazy to read the articles I posted and have quoted. You are such an idiot.
Just for your small brain - links to the "useless articles" I have already posted below and some key points.
Back in 1991 the value of housing debt divided by disposable household incomes was just 35 per cent. Today it is over 140 per cent - beyond any previous peak. And climbing every day.
And it is not clear that all borrowers - and especially the record 40 per cent share taking out "interest-only" home loans - will be able to service the repayments required in an inflationary world. We're talking mortgage rates back above 8 per cent, which is only a touch higher than their average level since 1993.
Lehman Brothers had assets on its balance sheet equivalent to 5 per cent of U.S. GDP. Each of the Big Four’s balance sheets shows asset holdings equivalent of 42 to 48 per cent of Australian GDP. Two of the Big Four today hold less cash but more assets than Lehman Brothers did fifteen months prior to its collapse. The banks will experience financial difficulty if they are unable to lend more to new homeowners and investors than they did the prior year.
In the property-market, the average new ‘home loan’ in the most populous state, New South Wales, is now higher than the average ‘purchase price’ of a property in New York City ($507,000 last year, or 7.6 times the average household income in the region). In the state capital of Sydney, the situation is even more mind-boggling, with prices over 10 times the average wage ($820,000 v $78,000). By contrast, in well-managed economies like Germany and Austria, the ratio is between three and four to one.
• Lack of information and transparency. Banks, the media, the Real Estate Industry and the government itself have obfuscated the market, spreading misinformation thereby giving buyers misplaced confidence that prices are based on "fundamentals", and not based on debt and cheap credit. The media push articles to 'spruik' the market, using nonsensical phrases such as "sideways growth", "softening" as well as fear and speculation to push people into the market. The threatened removal of the First Home Buyers grant causes people to purchase before the grant ends to take advantage of it. The FHB grant has ended how many times now?
Essentially, the bubble will continue until it hits a brick wall, when the rise in price finally pushes out enough home buyers. The crash will therefore be forced due to the inescapable financial reality, rather than a correction due to changing market conditions. It is not clear when this will happen, but there may be a few years left. The end result will be a disaster for Australia. Our banking sector will have lost much credibility and Australia has little going for it other than mining and the FIRE industries. Without prior economic reforms or economic restructuring, this burst has the potential to push Australia into very hard economic times. Also possible, is an external factor, such as a worldwide GFC, or economic trouble in China.
