massive housing shortage- new govt report, page-9

My perception is that the rental market in Perth is reasonably tight. Additionally our economy is growing at triple the rate (or more) than the rest of the country and we have not had increasing housing stock, yet house prices are still falling. This gives you an idea of the magnitude of previous price rises, but also highlights the fact that the govt. has overestimated the multiplier effect mining delivers. Melb on the other hand would need a lot of migrants and greater fools to keep their prices going. Supply seems to be rising month on month.

The issue next year, should we experience yet another credit crunch (domino from EU) isn't interest rates, but the availability of credit. Banks will not lend, the stock market will continue to be depressed and baby boomers super and personal portfolios will still be in the gutter, so why would there be some great increase in housing investment activity in this type of environment, even if rates plummet??? Lower rates will help existing mortgage holders and investors, but at this point it's far far more likely they will be using the extra cash to pay down the debt as fast as possible, because they are already saturated with leverage.