australia's property risk is rising, page-7

A lot of property speculators were just out of nappies when the last real correction occurred (*81-83).

Add to this, the Reserve Bank has allowed rampant property speculation and has failed to resist political pressure and allowed interest rates to stay low for too long. The only growth during the Howard years has been property speculation and welfare.

Cheap money and Gov. handouts has encouraged a large section of the community to believe that they can have everything they want, immediately, and someone else will pay for it for them. ie. the value of their house or houses will double every couple of years and they need do no more than borrow more money.

The prudent have funded the foolish leaving very little reward for saving and balancing their budget. Savings are loosing value.

But things are changing quickly, thank goodness.

Despite Government interference, interest rates are rising. Nothing will stop this now.

Property prices which have doubled in the last 3 years will halve. In desperate cases they will fall further. Banks will be virtually insolvent.(Do you remember the desperate situation in the Westpac Bank 15 years back, when Kerry Packer took a major shareholding in the bank and saved it from total collapse.)

Don't think it can't happen again because all you under 30's are about to get one of life's lessons.

There's no free lunch.

The smart operators are leaving now while a few foolish buyers still remain.