Well we all know the yanks are screwed house prices are falling and troubles on the horizon. My question is how will this effect the Australian housing market.
Been a first home buyer only 1 year ago there is the thought that i may have bought at peak and am in for some loss.
But i've been reading up and there seems to be many differences between the US and Aus markets and im now thinking we will be spared the brunt of the problems in the US.
A few things i have considered is:
1. The fact that house prices "sydney" have been relatively stable for the last couple years and haven't been sinking rather just platued.
2. Australia has no foriegn debt
3. We are experiencing a commodities boom that will unlikely end (but may slow down) for the next 20 years. Thus giving our economy a steriod shot for quite a while.
4. We have inflation increasing but because our wage growth and economy is strong it appears that if controlled should have a minor effect on the market as a whole.
5. If there are probs in the world economy and our economy slows wouldn't the RBA be likely to lower interest rates thus increasing house prices or we let our economy slow and dont increase rates to curb inflation and house prices remain stable.
I understand the US consumer drives alot of global growth through consumption but i see alot of other potential consumers out there in developing countries.
One other thing i have thought is that perhapes if our economy does slow people may move from the booming mining centres as production slows and "come home" to other states with their pockets full of cash.