The long term issue moving forward is not (and never really was)...

  1. 5,876 Posts.
    lightbulb Created with Sketch. 305
    The long term issue moving forward is not (and never really was) the property market itself per se

    While the economy is more or less holding up, changes to interest rates, taxation laws etc or anything relating to banking or land release etc. or foreign buyers are enough to keep the ball rolling with property - and that is precisely what has happened

    The real question is what happens when the economy itself comes under real stress from either - external shocks (think China), rising unemployment (or parallel to that falling wages - with bonuses included this has already begun this year), the mining investment cliff, the end of manufacturing, a lower dollar rate supporting exporters but killing retail at the same time, an aging population and technology coming for half the current jobs etc. - or all of these at the same time

    Either way, Australia is in for a loss to income and with it living standards due to the clear end of the mining boom - it just hasn't filtered through the system yet - wait till people realize how far out treasuries forecasts are, and benefits and services get hit etc.

    There is so much hubris around the property market but with all of these issues looming and some of the highest private debt and leveraged banks in the world now is not the time to be complacent

    Government can stoke the fire as they like - but if that stoking does not stop the falling economy a real day of reckoning could be just a matter of time

    Sure, now people won't sell property,everyone wants in - what do people do when they can't pay the rent or mortgage cause business is totally uncompetitive and there are limited high paying jobs (right now one mining job is being replaced by perhaps four service related jobs)?

    Think about it
    Last edited by Andrew1234: 02/08/15
 
arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.