I'd say about 90%+ of buyers in central London are foriegners, rich Saudis, Oligarchs, European banksters, international pop stars, etc, it is not a 'normal' example of a typical housing market.

London did hold up OK but only because the value of sterling fell by 25% making those houses cheaper by 25% just on the currency exchange, a bargain for rich internationals.

Speculative investing is THE only reason why investors buy now, rental yields are typically 3 - 4%, cost of holding property 1 - 1.5%, gives you a yield of 1.5% - 3% against borrowing money at 7%!!! So, property HAS to increase every year by at least 4% just to break even. To me, that's the biggest warning sign of all.

It's OK though because we all know that property doubles in value every 7 years. That's 10% year on year!!!!!

Exactly. To people outside UK all British housing is in a 30% sale. It irritates me when people come on here and say that Australia has priced them out of moving - it the British Government that priced you out.

The world is in a currency war and Australia is ecstatic about being the loser.

The British government is encouraging a weak GBP£ in order to get themselves out of recession, along with almost every other developed nation, it's a race to the bottom.

Australia will soon have the world's most overvalued currency and our tourism, manufacturing, exports (non mining) will be farked!!! Thank goodness evryone works in the mining industry here ........

Fact check your posts please, mining and property.

LOL, of course, silly me!

I don't hear any Australian importers complaining about the strength of our currency. Australian tourists seem pretty pleased, and so am I; Amazon is finally affordable.

More debt, less income. Go Australia! Out with a blaze of glory!

You may want to check again who Australia exports the most too, China, Japan, India and other Asia Pacific countries. All of which are doing very nicely and in the case of Japan have a strong currency, making Australia's imports to them cheaper, China have allowed theirs to appreciate a bit, and if the US get their way a lot more, making Australia's imports cheaper to them again.

No way is this one as clean cut as you think, the Euro's and Americans are playing pass the unemployment, whilst Asia looks on and prospers, for now at least.

Australia has a serious trade deficit. Of course the Chinese don't care, they buy the Aussie raw materials and sell it back to you for a multiple of the price. Aussies seem completely oblivious to the fact that the country is effectively living off it's credit card and has been for decades. That debt has to be paid back at some point and it will be a hard slog, Europe and the USA are simply ahead of Australia in this regard.

EDIT: I've just looked at Australia's balance of trade figures since 1971, I summed all of the monthly balances since then and Australia looks to have run up an external debt of AUD 211,000,000,000 overall since then. http://www.abs.gov.au/AUSSTATS/[email protected]?OpenDocument

Does it? I thought it was $50billion, going back to a surplus end of this financial year.

UK - £152billion and national debt of nearly £1 trillion! That's what I call serious.

Are you looking at public sector debt or private sector debt? Now ask yourself what happens private sector debt when things go pear shaped.

You said Australia has a serious trade deficit - it doesn't. Private companies that operate within Australlia may do and these are global companies (mostly) so their problems aren't Australian made only.

You probably know as well as I, that talk of a countries deficit is implicitly public unless specified otherwise.

Anyway, I understand where your coming from and believe your correct that buying a house as an investment in Australia is financial suicide right now. As a primary residence though I'd have to disagree - you can't put a price on my castle, my little bit of Australia.

No it doesn't, it's companies and consumers that have that liability, of which is still insignificant compared to most other developed nations. This point in time is quite interesting really, and re-visiting threads like these every year are good to take stock, housing doomers have major egg on their faces for now. We could go either way, a long period of stagnation of housing, or if the RBA decide to let inflation run away in the name of protecting Aussie exporters, watch the houses take off again.