In December, I started a thread of how global macro factors will...

In December, I started a thread of how global macro factors will continue to weigh on property in the long run, and how the commodity bust will eventually weigh on Australia.

At the start of the year, iron and oil had a brief dead cat bounce which was short lived. Since then, iron and oil continue to crash. Iron and energy stocks, including the big so called safe long term stocks, continue to move toward multi year lows.

Anyone following the global macro scene, will observe the wild fluctuations in major currencies like Swiss franc, euro, etc. This is all part of a currency war. Australia could get into the currency war later on, with reduction in interest rates. This will give property speculators all the more reason to pour into the property sector but it is not sustainable, and will lead to stagflation. Property investors might still have their property value at higher values, but increasing number of people will not be able to afford it, and this will hit other areas of the economy.
Another real possibility is that lower interest rate will continue to hammer the AUD and foreign speculative investors in the Aussie property market will exit to avoid any further foreign exchange loss.

Commodity companies coping with reduced demand and massive global over supply will have to continue laying off workers, having large impairments, etc. Unemployment will lead to reduced demand, which will hit all sectors of the economy.

Massive falls in share prices of major commodities and energy companies are a sign of things to come. Aussie property boom of last decade was based on global macro factors and global macro factors will once again come into play on the way down. WA and Perth should be the worst hit.