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  • Australians are buying $1 billion worth of property every single day, as prices break a 32-year-old record

    From businessinsider.com.au

    The housing market is running out of records to smash, as Australia experiences a perfect storm of easy money, record low interest rates and government incentives. Prices nationally shot up 7% in the three months to May, new CoreLogic data shows, marking the fastest quarterly rise since 1988. The astounding figure was led by Sydney, which rose 9.3% in the short space of 12 weeks, supercharging the quarterly average and dwarfing even the mighty run up seen during 2019.Fuelling all of this is a record amount of credit that is pouring into an already hot market. “Over April 2021, approximately $31 billion was lent for ... (full story)

Is the western world addicted to rising house prices? Here in the UK it's just the same, they can't just keep rising..........
it will end somewhere...just dont know when.
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I have seen that a few times before. It didn't end up good for a lot of people.
At last the Aussie is moving in the right direction, many pips will be forthcoming.
I happen to be acquainted with a credit risk analyst at an Australian bank, she is a clever actuarial maths cookie.

She is shocked, horrified and mortified at how slack (generous) bank lending practices currently are. This comes from top down - the lending officers themselves are merely following bank policy. Board and management approved, apparently.

This is not a recommendation or a thumbs down - I know nothing about investing in stocks/shares.
It will keep going up , it is just simple mathematics - a lot of people don;t feel comfortable with stocks and shares and with deposit rates on the floor there is nowhere else to put your money.
All the central banks, US, UK, AU , NZ etc monetary policy has forced the real asset price inflation, and in some countries like AU and NZ repatriating immigration hitting short supply means that price has nowhere else to go but up.
We are all actually just floating in a very inflationary sea at the moment but no-one wants to admit it "officially",
been that way for some years !
Quoting aquavox
It will keep going up , it is just simple mathematics - a lot of people don;t feel comfortable with stocks and shares and with deposit rates on the floor there is nowhere else to put your money. All the central banks, US, UK, AU , NZ etc monetary policy has forced the real asset price inflation, and in some countries like AU and NZ repatriating immigration hitting short supply means that price has nowhere else to go but up. We are all actually just floating in a very inflationary sea at the moment but no-one wants to admit it "officially",...
Totally agree aqua not mentioned is the income/earnings ratio to housing prices. It is HUGE. Here in the UK nothing more can be done (no tax at present, and rates yada yada)
Would this house buying phenomenom have a devastating effect on the ESSENTIAL Velocity of money where household are now alocating more and more to mortgage/rent payments rather than spending in the wider economy?
Will it crash I think yes. Will it crash to zero? HELL no but will I see a correction that will hurt some people badly? ABSOLUTELY.
Im not doom and gloom on this BTW short to medium term a bad event but longer term MUCH better and the grown ups (hopefully) will not do this again.
Quoting UKBanter
{quote} Totally agree aqua not mentioned is the income/earnings ratio to housing prices. It is HUGE. Here in the UK nothing more can be done (no tax at present, and rates yada yada) Would this house buying phenomenom have a devastating effect on the ESSENTIAL Velocity of money where household are now alocating more and more to mortgage/rent payments rather than spending in the wider economy? Will it crash I think yes. Will it crash to zero? HELL no but will I see a correction that will hurt some people badly? ABSOLUTELY. Im not doom and gloom on...
Yes agree there will be correction, but unfortunately it's rising house prices that keep governments in power so they'll keep stoken it by varies means! It makes house owners feel good, their asset is rising ........
It doesn't seem to matter that their kids and grandkids won't be able to afford anything unless they're lucky to inherent something
Quoting rover99x
{quote} Yes agree there will be correction, but unfortunately it's rising house prices that keep governments in power so they'll keep stoken it by varies means! It makes house owners feel good, their asset is rising ........ It doesn't seem to matter that their kids and grandkids won't be able to afford anything unless they're lucky to inherent something
Another thing is it seems this splurge seems not to take into account the negative effects of the last couple of years. Governments are going to cut back and increase tax they just havent done it yet. The books must be seen to be balanced. People are gonna get laid off............ And jobs take MUCH longer to create than destroy. To think there is not going to be any sort of major repercussions is absolute fantasy!
Quoting UKBanter
{quote} Another thing is it seems this splurge seems not to take into account the negative effects of the last couple of years. Governments are going to cut back and increase tax they just havent done it yet. The books must be seen to be balanced. People are gonna get laid off............ And jobs take MUCH longer to create than destroy. To think there is not going to be any sort of major repercussions is absolute fantasy!
Spot on and not only will people have to deal with higher taxes but also higher interest rates. Rates are at the bottom of the cycle and can only go up from here.
Yes all very valid points raised here.
and i agree especially that .."households are now allocating more and more to mortgage/rent payments rather than spending in the wider economy .." thinking about it - its probably the largest factor in slowing down the velocity of Money in the whole system - it is totally unproductive, unrepeated, and simply sits as a digital entry in a bankster's account waiting to be fractionally on-lent into yet again another unproductive artificially inflated asset.
The governments all want sheeple to think they are well off ( even when the opposite is true) so they can get re-elected.
the rise of taxes and interest rates to come is really going to throw a spanner in the works, but the effects of that, are yet to hit.
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  • Story Stats
  • Posted: Jun 11, 2021 2:14am
  • Submitted by:
     Newsstand
    Category: Fundamental Analysis
    Comments: 11  /  Views: 2,018
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