What we seem to forget is that the Australian Banking instos were lending relatively responsibly. The whole fiasco is US generated and the mistake the Oz banks made was to buy the rubbishy US conduit stuff.
The credit crunch has not been through what has happened here. If our rates remain high , and defaults become an issue then things become questionable , I agree.
But where on earth can we draw the conclusion that their lending practices are flawed on empirical evidence and need drastic change.
Once this crisis of confidence passes there are a lot of buyers out there, if people are required to have a good deposit all well and good but we need to remember that there is still a heap of equity out there where parents can assist their kids, investors will re-enter with the required accumulated equity.
At the end of the day the US is hopelessly oversupplied with housing , we are not -we are undersupplied. Mr Rudd has made inflation a lets knock the previous govt part of his platform and look where it has got us. Lack of supply, responsible lending will see prices recover, over a period of time, confidence will return and there is only one way the housing prices will go , albeit at more realistic growth. There is a pot of cash out there and when boomers particularly are ready it will recover and move on.
We still have a strong economy, low unemployment, banks are still lending - albeit more cautiously.We just need to shake off the BS thats floating around. When it turns and confidence re-enters the market Australia will recover more speedily than most nations.
