ABCDiamond

So it has done better than most, due to the availability of a large surplus that was in reserve, and able to be used for the stimulus.

Other countries did not have that.

That tells me that Australia was special in having the ability to use what it had.
Or is that foolish thinking ?

Max&Ozzy

Of course it's wearing out, I spent mine the same month I got it and I'm sure most others did the same. After that nothing much has really changed in my world so if the stimulus papered over some unnoticeable cracks caused by market factors in other economies, so be it. As far as I can tell it must have done the job intended and Australia moves on. If I some how end up paying for it in the future, then I'll likely wear it, as that, to me, is how life seems to be. At the moment though I quite enjoyed getting my snorkel for the 4X4 paid for and I'm pleased to see my savings rise again. I fail to see how a recession has to happen here. I realise some people might wish for the prices to decline, (mainly housing) but I think those statements are driven more by personal want than market data.

swigski

There may have been a surplus in 2007-2008. Not any more, or forecast for the next 4-5 financial years.

Maybe Australia being special meant it needed more help than others hence such a massive stimulus?

Or is that foolish thinking?

swigski

A Financial crisis does not directly affect everyone. Before I left the UK at the what you could call peak, I had never been so well off! When the recession hits Australia, house prices will drop. That is not personal want but fact.

ABCDiamond

Are you really saying that it is a FACT that a recession will hit Australia, and that house prices will drop ?

swigski

In my opinion a recession will hit Australia and if so it has to be a fact that house prices will drop.

jimbo_d

Mate you're talking utter bollocks. Australia had just about the smallest stimulous package out of all the industrialised developed countries in the world, their total debt is about $55bn, compared to US's 1 trillion+, UK's 700bn etc, tiny small fry that if the economy continues as it is will be paid off in a couple of years.

bcworld

It's actually not bollocks...as a percentage of GDP Australia has spent more than almost every other comparable country (if not the most) avoiding the recession, I saw the numbers the other week but can't find them again. The fact is the money was there to do it, which was different to some other countries.

ABCDiamond

Did house prices drop in the 1990-91 recession ?

swigski

The only countries with a bigger stimulus as a % of GDP (which is the most important part) were Russia, S.Korea, China and S.Africa in 2009. For 2010 the only countries to forecast a bigger stimulus are S. Africa, S. Korea, China and Germany.

If you would like to learn something, here is the link.

http://news.bbc.co.uk/2/hi/business/8214272.stm

king kong

yes i believe they did ,im only going on personal experience though . I know i lost on one house and gained on the other ,they both dropped by 10% but what the official figures would be i dont know . i reckon from experiencce the 90-91 was worse for us ,there was absolutlely no work around at all .
Mind u rates were very high and house prices were roughly 3 to 1 average income for good homes .It was a better scenario for a sustained recovery but now with the rates so low and prices so high in relialty compared to then it may be a case of property having to come down a bit and wages growth to make things more affordable .
I honestly dont know where it will go but i think people are strethched enough as it is .

ABCDiamond

I bought a house in Sydney in 1990 and it didn't go down, therefore for someone to state that it is a FACT that house prices will go down during a recession, may not be quite factual, in fact. As, in actual fact, mine didn't. FACT

I agree with your "I honestly dont know where it will go "

swigski

Shane Oliver of AMP says during the recession in the early 80’s and 90’s, the property market struggled as a result of the rise in unemployment, which triggered mortgage defaults.

“In the early 80’s house prices fell 12% in real terms. From 1989-93, property prices fell by 23% in real terms. So if you take the inflation rate over the next two years, which is averaged at around 2%, then real decline would mean nominal prices could come down by 15-20%,” he says.

FACT!

swigski

So you bought in 1990. When did you sell?

Catch

beat me to it ,correctomundo