Fair enough. As a more macro discussion, because i'm bored, the rate rise is an interesting question. they'll have to do it eventually as they'll need to curb inflation. However, also we are pre-election so there is likely to be all sorts of goodies sprinkled from canberra on the good people of Aus to keep the good times rolling in the property sector.
That aside, i'm not overly convinced a rate rise will gut the share market.... it may go the other way as those chasing cheap loans to build "property portfolios" divert that cash to the markets.
the start state for the impending correction is also worth considering. House prices will take a dip but you'd be aloooong way from touching LVR as Aus property turn over annually is <4%...meaning that 96% of the housing market is sitting on crazy amounts of equity... re-enforced by the average debt to value comparison ...sydney as an example average mortgage being 720K, average value being 1.4m.....thats 50% equity. Sure there will be the odd sad sack that used the equity to buy a dodge ram that will cry poor on A Current Affair, but the majority will take a paper loss that effects nothing in reality. It may provide an opening for new comers to the market, but look what happened during the GFC, markets tanked for 6 months then went on a 13 year rocket ship ride.
Then taking another step backwards, I'm not sure Aus is a big enough global player to influence the global market, so as our dollar falls people will be looking for earners in foreign currencies...... who gets paid in foreign currencies.... yep... mining companies. So the resource balance sheets will look amazing..... take BHP who bagged from the bottom at $20 in 2009 to $43 in 2011..... thats a Blue Chip that bagged!
As always, regular joes will have their teeth kicked in and the diversified and invested will get richer. that's my bet, just gotta make sure you can survive the initial drop, then its clear skies.
