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Old 26th Nov 2008, 10:36
  #15 (permalink)  
Mstr Caution
 
Join Date: Jul 2006
Location: Australia
Posts: 1,188
Chairman,

I have to agree with you there regarding property in the short term.

Falling interest rates will not stabilise the property market. But as with any other property cycle, once it does turn in X amount of time, historically the gains have been around 20% over the first 12 months.

Unfortunately Joe Average is only considering falling interest rates as to the indicator for the direction of the property market. The interest rates although a factor will not determine the outcome for the property market.

The negatives as I see it are:

Affordability Rates (or lack thereof)
Reduced loan approvals indicating low demand
Low construction approval rates
Low consumer confidence
Volatile Share markets
Low pent up demand (underlying demand)for property in established areas
High Construction costs
Unemployment on the rise
High household debt levels
Retail sales figures
Fallout from the current global economic shocks
Diminished disposable incomes

My concern is the Federal government is encouraging first home buyers to purchase property, but what if those properties were worth 10 or 20% less next year?

Last edited by Mstr Caution; 26th Nov 2008 at 21:30.
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