moondoong "FACT - Either asset prices must deflate or wages must...

moondoong

"FACT - Either asset prices must deflate or wages must inflate to bring things back to a normal range"

This is correct else where, but in Australia there is no choice, the RBA will not allow wages to inflate, as its job is to keep inflation down.

there for, House prices must come back down.

Which means, Warnie's investments will drop by 40% while interest rates keep climbing.. which means he will end up paying double what he is now for his house's when they are only worth half as much as todays prices.


I think what happend in the US with subprime mortgages is going to happen in Australia with prime mortgages. They will get too expensive to maintain, people will keep selling property to drop their debts, and no one will be buying because they cant afford houses at the new higher interest rates.. which means 40% price drop

Warnie, its like shares mate, when the price goes real high for no reason, its time to sell because its over valued.. but then, there has to be warnies out there to keep buying so us smart people can offloan our stock hey!

You will end up a broken man..

watch the news mate, all the warning signals that tell you the housing boom is over are alarming.

High Interest Rates
High Rents
Low volume of sales
Bottom end of the market slowing down while upper end still turns over (hence why the median is going up)
People defaulting on home loans
Share market slow down
People not able to find rental properties
Spending on general items slow down

you are about to lose a lot of money warnie.. why dont you buy some more houses?