Guys, there is no shortage of money. Our banks are still willing...

Guys, there is no shortage of money. Our banks are still willing to lend, and lend big. They can still get funds on OK terms from overseas (at the moment).

What we are seeing emerge isn't about credit availability, its about tapped out consumers feeling their wages are capped in real buying terms. Wages aren't growing (haven't grown) in line with credit growth for the past 10-15 years. Thanks to credit growth, costs have risen everywhere. Some in the community are now struggling to pay their bills. This has an inevitable knock-on effect on the housing market.

I can see us experiencing two forces at work simultaneously - inflation in the costs of things you need, and deflation in the things you want. That is, family budgets are directed toward essential spending (food, clothing, bills, etc) while discretionary spending suffers. Shelter is definately an essential item, but I'm categorising it as a discretionary expense when it is viewed as it is in this country - as a lifestyle choice. I expect that preception to change, in fact, it is already.