Steve2009

Do you think 3.5 years is a long time? I've heard research cited that suggested it takes 7 years on average for an economy to recover from the effects of an asset bubble bursting. That is the wider economy, not prices for the asset concerned. If you think 3.5 years is a long time when the economy is ticking along then try 7 years of economic depression. 3.5 years would not be a long time if you had a decade or more of negative equity to work through.

Margaret3

I bow to your superior knowledge i am clueless about this stuff (just a lowly nurse mate), all am saying is i see absolutely no slow down of the house prices and sales in melbourne, dont get me wrong i would be delighter to see it. I know people talk about houses, economy, profit and loss , investment on here, but all i want is an affordable home, am not interested in making x profit or y loss, i just want a home!!

The only other thing i do know , is i did work through a decade of negative equity in the 80's/early90's, am knocking on 50 now and cant believe am living in rented accomm........

Steve2009

I wouldn't suggest my knowledge is superior. I think people should be aware of the risks of buying property though. There's a lot of hype around the property market, hype that surrounded other markets that collapsed. Buying a home is a huge financial commitment and people should go into the transaction with their eyes wide open. There's a lot of people in other markets very bitter right now that nobody told them this could happen. It's not about making a profit it's about the risk of serious financial hardship in the event of a collapse. If you're looking for affordable housing right now, you'd be well advised to consider renting. On a cash basis it works out a lot cheaper although there are other factors to consider.

Margaret3

Been renting since we got to aus, the reason we haven't bought it we just cant afford to, so obviously renting is the safer bet for us!

asprilla

No they don't. And lets be honest here... they're also not very good.

fish.01

I don't listen to the spruiking either way as I don't know the background of the various commentators and not interested enough to find out.

I just think Australia is no different to anywhere else. Other countries had to have a catalyst before their market popped (ie changed conditions) so I would expect we would need that as well.

I watched the last 2 times this happened in Brisbane over the decades and the market landed quite softly with moderate drops and then just sat stagnant for a decade (with very slow increases behind inflation until houses were affordable again). If no other external factors induce a big pop I keep this in mind as a possibility this time as well.

Steve2009

Fair play to you. I think it's actually I who should be bowing to your superior knowledge in this regard. Spare a thought for the poor sods of twenty somethings getting into 35 year mortgage terms right now. They're committing themselves to still having a mortgage in their late 60s. There may be a chance at an upside for them, but that's the contract they're signing.
I wouldn't fancy getting into a hefty mortgage when I'm at your age either. Hope everything works out in the end for you. If it's any consolation at least your landlord is substantially subsidising your lifestyle at the moment.

Steve2009

Thank you for expressing your esteemed opinion on the value of heuristics. I'm sure it will benefit the discussion on house prices no end.

Steve2009

You're probably right that there will be some catalyst, that has been a feature in other bubbles. Bubbles are unpredictable.
It has been a feature of other bubbles that they have had pauses. From what I've seen the Australian bubble would seem to have ramped up considerably in the last decade. There are lots of factors to be considered, including government intervention, which make predicting a crash difficult. Given the duration of most mortgage contracts now I think you'd have to take quite a long term view on likelihood of a crash.

paulry

Well said

GoldCoastOrBust

On the GC houses aren't shifting at all, very slow market. I would be cheeky, a mate of my has sold his recently for a lot less than the asking...