Australia's largest stock trading and investment forum Australia's #1 stock forum

Can we just simply build more houses / units to slow down the house price madness !!!, page-110

First 110 Last

Share
Profile

Follow
kingpins

26,700 Posts.

40

28/05/24

14:32

Post #: 74045703
Share

Originally posted by Menta ↑

When property changed from being simply a place to call home to being an investment asset the game completely changed. It was then no longer about supply & demand, which determines the price of goods & services, it became all about the supply & demand for credit.

Australia's housing bubble, like all assets bubbles, was fuelled by credit growth and the current historic level of household debt, now some $3 trillion, is already unsustainable even with record low interest rates. As interest rates rise, bond yields have been rising globally for many months which is already placing upward pressure on the cost of international bank funding, unfortunately the debt burden with become just too much for too many Australian families to maintain. The resultant forced sales will quickly turn into a flood and lead to a house price crash. In such a rare deflationary spiral we can quickly transition from perceived under supply to actual over supply of housing, especially as people become less and less willing or able to borrow and banks become more and more reluctant to lend. We are about to enter tragic yet inevitably unprecedented times.

Expand

Certainly what you post did have some effect, but IMHO the main culprit is and was Government policy, actions and language which made people desire to get on the bandwagon to a fortune as they could not lose
Upvote

Reply

Top Stories

Trump chides Powell as Goldman call for calm. The RBA must be nervous

ASX Market Close: Another ATH close for Oz bourse on mining rally | July 2

Listen: HotCopper Wire Podcast 016 – FY25 ended up not so bad... but Trump unpause is coming

Wednesday's HotCopper trends: Trigg $12.5M placement, Domino's shock exit | July 2

MEU

Double-time: Marmota starts deeper Greenewood drilling days after title transfer

First 110 Last

SPONSORED BY