bit difficult when the savings rate in Australia is negative....

bit difficult when the savings rate in Australia is negative. People are obsessed with spending and living from paycheck to paycheck and taking on more and more debt. Unsustainable, imho. A rate rise by the RBA will help things move in the 'correct' direction


http://www.smh.com.au/news/business/home-prices-sink-forever/2006/04/05/1143916591308.html


'Home prices sink forever'
Email Print Normal font Large font April 6, 2006

BABY boomers relying on their homes to keep them safe, warm and rich in retirement may find lower birth rates stunt demand for the real estate in which most of their savings is locked.

Addressing the Melbourne Financial Services Seminar yesterday, AXA Asia Pacific chief executive Les Owen said 50 years of growth in house prices could reverse itself as a large and ageing population sought to fund retirement by selling homes to a smaller population of workers.

"It is quite possible that as the baby boomer population moves into retirement and seeks to trade down property to fund its need for income, and with reducing numbers of people coming into the workforce and creating demand, we could in the future see a 50-year negative trend in house prices," Mr Owen said.

Australians would struggle in retirement unless they saved more. "We have seen, in a little more than a generation, a major cultural shift from thrift to consumerism," he said.

Mr Owen conceded that, as the head of a funds management company, he stood to benefit if Australians increased their savings.

"Yes, it would be good for us but I think it would also be good for the country," he said.