Budawang

Yes, but Sydney prices are still up slightly year on year. The only city to show a decline is Perth which is kind of strange given their booming economy.

A gradual decline in property prices will be a good thing IMO. Tax cuts, high immigration and the mining boom should cushion the crunch in Australia. A 10% decline over the next 3 years would be a good outcome. This means housing would be about 25% more affordable 3 years from now. Probably more so if interest rates drop.

jad n rich

Basically with the media at the moment if you own

a. a house
b. shares.
c. cash in the bank
d. superannuation

or need to spend money on

a. food
b. petrol.
c. gas
d. electricity

your furked

Right so were all doomed.

And of course there will never be another economic up cycle

Budawang

The mining boom generates billions and billions in government revenue through royalties, company taxes etc. That's why Oz has a $22 billion (probably more) surplus while the US and UK are wallowing in big budget deficits. The UK's budget deficit was 20 billion pounds in the last three months alone. That's huge. Public debt is back up to 38% of GDP while Australia has net public assets, not debt.

This means, as the economy slows and inflation falls, Australia can start spending some of its surplus which will boost domestic demand. The Australian economy's fundamentals are much stronger than those of the UK and the US.

dave7370

I managed to sort a forward contract with HiFX today and due to a delay in faxing some paperwork off to them it's cost me nearly £400 on the exchange in one day.:curse:

Hey ho, thems the breaks.

Wol

It's a matter really of the way one views things and from which direction.

Certainly, round here, we haven't yet recovered from the shock of just how many poor there are around and how the infrastructure is crumbling about us.

NSW really is a basket case: the government is corrupt, incompetent, hubristic and to all intents bankrupt. The health service is in collapse, the roads are falling apart (except for the one connecting Sydney and Canberra that the politicians use), public transport is a mess and there is no forward planning of any of the utilities. WA by comparison is utopia - but it is not more than a small fraction of the Oz population.

BATS666

.... me thinks sum people see the Oz economy thru rose tinted specs, like a world economic downturn will not affect them !
Yeah, right. Nice ostrich impression !!
....and an economy based almost solely on one industry has alot further to fall than most !

Mallory

http://www.bloomberg.com/apps/news?p...efer=australia

interesting read

Hotton

A lot of truth in it But you will still get the ones who stick there fingers
in there ears and say mmmmmmmmmm Saying Australia is imune from
the credit crunch we have coal mines blar, blar, blar ,and spit the dummy if
anyone tells them different Sydneys house prices not falling pigs arse

Wol

Indeed - but no doubt the rose-tinted brigade will rubbish it, as they have every post that has referenced the likely Australian housing slump.

It's not rocket science: regardless of the increasing demand from immigration and population growth house prices CANNOT rise beyond the point where they are generally affordable. And now that banks are beginning to see the light and are lending less and only to better risks, there is immense downward pressure on prices. I think this will only increase as more repossessions start hitting the market.

BATS666

yes, I started a thread with this headline this a.m.
Repeat after me "We are not immune, we are not immune"!

Budawang

And I suppose an economy reliant on the export of financial services is well balanced? It's no coincidence the UK is being hit harder than most by the credit crunch.

Centurion

I think most people on this board would love the Australian economy to be heading down the toilet with the UK's. Thats purely based on the demographics of there being more posters on here in the UK than in Australia.

Wol

I don't think anyone's trying to make too accurate comparisons between economies, merely pointing out that the idea that Australia is in some way insulated from what is happening elsewhere isn't sustainable.

Budawang

I fully agree that the cost of housing is too high in Australia. If we're able to pull off a couple of years of flat or slightly falling prices (producing a significant increase in affordability over time) we'll have avoided the carnage the UK and US are enduring. It's all about deflating the bubble in an orderly manner. So long as the readjustment is gradual, we'll easily avoid a recession. There are some powerful factors in Australia's favour:
1.the RBA has taken an early and aggressive approach to controlling inflation,
2.interest rates can fall much farther than in the US or the UK where they are already low
3.the dividend from the resources boom means the government can pump prime the economy should things turn really nasty.
4.unemployment remains at record lows
5.immigration will provide some support to property prices

Of course, if the emerging countries suddenly go off the rails all bets are off. Australia will have a recession at some stage. However, in the current context the US government would kill to have Australia's economic problems.

Wol

>>There are some powerful factors in Australia's favour:
1.the RBA has taken an early and aggressive approach to controlling inflation,<<

True

>>2.interest rates can fall much farther than in the US or the UK where they are already low<<

A two-edged sword: the A$ is sustained in part because of high interest rates here, and a high A$ means imports - in particular, oil - are cheaper. If interest rates decline the A$ will probably fall somewhat and oil will go up.

>>3.the dividend from the resources boom means the government can pump prime the economy should things turn really nasty.<<

True

>>4.unemployment remains at record lows<<

Inflationary pressure here.

>>5.immigration will provide some support to property prices<<

Some support, yes, if you view that as a good thing. But prices are still too high in general to do much except at the very least wait for incomes to catch up.

>>Of course, if the emerging countries suddenly go off the rails all bets are off. Australia will have a recession at some stage. However, in the current context the US government would kill to have Australia's economic problems.<<

The recession we have to have. (Now, where have I heard *that* before?).