TwobeesYour call is that credit card debt is so high right now...

Twobees

Your call is that credit card debt is so high right now that we are going to see a wave of foreclosures? Where is the evidence for that? I have shown you RBA evidence as to the low levels of total household indebtedness as evidence that household balance sheets remain strong.

Evidence mate, evidence.

In terms of stimulus, surely you arent saying the $900 cash bonus was used on home deposits? If you are talking about monetary stimulus, then the low interest rates we had increased affordability did it not? Then according to your logic should not house prices have gone up they way they did as a rational market reponse? If you track house prices in the last five years to real wages growth they are alligned. Right now with rising interest rates rising clearly affordability is an issue, but real wages growth coming through from the real economy is a buttressing factor for any future rate rises. So how does this lead to a crash?

Banks are asking for more deposit. Agreed. Interest rates are going up because the economic fundamentals remain strong. Agreed. However this to me is actually evidence that we aint gonna see a massive fall in house prices anytime soon. Why? Because the people borrowing are the people who can afford it. No forced sales, no 20% drop in prices. Simple. Why would someone who has just bought sell for a 20% drop next year? why not hold after up to 12 months of Saturday insepctions?

Sentiment- have you seen world markets recently? Personality disorders supreme. Price of gold going through the roof. you think really that sentiment towards property as an investment class is going to drop anytime soon relative to shares?

I do agree with you that the only way i see 20% falls in house prices is there is GFC2 and China and the world falls off a cliff. Although given our current unemployment rate cant remember when jobs were lost that much and what recent China scare you are talking about. But to say you are predicting this as some fait accompli that is going to lead to an INEVITABLE fall in prices is simply beyond the rational forecasts of a lot of smart people.

Throw some ratios back at me please...