Saturday, January 14, 2012

One month of flat prices has Australian analysts back to heavy breathing

Implicit in all of these outlooks is the assumption that household formation should involve maximum debt. That's supposed to be a positive.

However, the HIA says the general outlook is positive - and doomsayers should respect the fragility of the recovery.

After November and December's official interest rate cuts, "there is every chance we may see a return to dwelling price growth", it said.
I have no idea what "respect the fragility of the recovery" is supposed to mean. Something like, don't breathe near the house of cards, please! (?)

"The rise in Australian capital city house prices is proof that the RBA’s rate cuts have had a real impact on immediate market recovery," Bouris said. "We believe today’s data is just the tip of the iceberg when it comes to positive house price movement heading into 2012 and it looks like for the first time in a long time, Australian home owners are taking back the market."

This guy takes the spruiker cake:
But these situations are dynamic and when the dust settles from the holidays there could be sufficient people wanting to take advantage of two interest rate cuts, to kick start the auctions.

Moreover, property is an asset measured in 10-year cycles and there has not been a decade since the end of World War II where property values have not risen. Modest asset growth will return when you measure it decade by decade – we just won’t see the asset inflation we saw in the 2000s.

Property prices turned upwards in November 2011, so now could be a good time to be in market. Even if you can’t afford to buy where you want to live, you can buy an investment property and continue to rent in the suburb of your choice.

I could quote Joye, but he is always heavy breathing.

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