Mike, I think there is a bubble in Australian property market....

Mike,

I think there is a bubble in Australian property market. This bubble is partly due to government's easing monetary policy and fiscal policy. Confidencee of investors Is the major determinant of the property prices. Once the confidence in property as an investment busts due to causes that are beyond the control of the government, the property will drop sharply, probably below their reasonable values.

The fresh lesson of the share market chaos during 2008-2009 should provide people with what that is to be expected to happen once the confidence in the property market busts.


Now the government and banks benefits from Stable and higher property price, so they will continue to try to support people's confidence in property as an investment.

Deposit holders are continued to be exploited by the banking sysytem as they receive very low real income from their deposit, but carry the ultimate risk of the banking system.



My opinions only. I am not good at expressing my thoughts.