"On October 1, NSW introduced a package of measures aimed at delivering around $35,000 to first home buyers of new dwellings priced at or under $550,000. There are also substantial, but lesser, benefits for those who buy new dwellings up to $650,000.
New south Wales government is assuming a lot here. What is the average borrowings on each of these homes I wonder. Tough lending guidelines may make this a slow process.
But then, considering those amazing employment figures released today, first home borrowers won't be too concerned by future problems in our economy.
However the root cause of our property situation is the cost of building in Australia. It is extraordinarily high like the cost of doing anything here.
This is why Australia is loosing hundreds of billions of future infrastructure spending.
The N.S.W government is only fueling the fire. If/when building costs are forced down and property prices subside those aspiring first home buyers will be the very first to feel it."
If you can see, through all the evidence to the contrary, that a property boom now is
a) good for our economy
b) not a bubble creator
then so it must be.
Over the years I've developed a lot of property and have been through quite a number of cycles. I am aware of how the system works.
But then there will always be deniers of the obvious.
Australia was lucky to miss the full force of the GFC but China hasn't. China's answer in 2009 was a massive domestic stimulus that kept our miracle economy afloat.
Now our exports are slowing and our AUD remains high till ~mid next year when the infrastructure boom tapers off. All indicators point to negative growth from late next year and at a time when the RBA would have dropped the cash rate to ~2%.
This doesn't seem a good time to embark on domestic expansionist property policies. It would be very, very short sighted.
Also Argentina is close to economic collapse. It's a fiscal screw up.
There are very few economies that are doing well. This is a global slowdown and before it's finished, possibly 75% of economies will go through contraction.
Why buy a property in this environment and expect capital gains?
