Show me an oversupply in available housing and I'll show you a housing price bubble
800,000 empty properties in Australia currently....if you peek under the covers of the media coverage of Australia's housing shortage it can *all* be traced back to the real estate industry which has a huge vested interest in perpetuating the fallacy.
Do you think it will cause the prices to spike and then make the housing bubble worse?
I doubt it will make any significant difference, it might tempt a few suckers into the market, but the apparent downsides now outweigh the benefits of getting a govt handout that the numbers of takers are unlikely to be enough to shift the market significantly.
The housing market is already starting to look pretty sick, the trigger for the crash is likely to be substantial rounds of job losses that force families to sell properties that they no longer have the ability to finance.
Have you been to a property auction recently?
I recommend it, you'll see more waving hands from a crowd of people modelling strait jackets.
One way to look at it is that the rental return represents the amount that someone will pay to live in the house, and the difference between that the cost of ownership (mortgage + return on invested capital) is purely speculative.
As the perception of future gains diminish then the speculative spread will shrink as rents rise, and prices drop.