Homes are to become more expensive

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    More expensive than it normally would have been during property booms.

    Adelaide Auction clearance rate is somewhere between 75 and 80%, which points to 8-11% annual growth.


    On top of that we are going to get supply of new properties killed by our talented Governments. Everything they do to "col property market" affects the home building. Home building is the "main" (and with the end of mining boom - the "only") engine of the economy.


    Killing home building pushes economy closer to the brink which in turn forces RBA to lower rates, which in turn sparkles more demand for the property.



    Thanks Tony and Joe.


    This (in turn) makes property more attractive "assylum" for the billions of dollars that Chinese have to park somewhere to avoid their home troubles:



    When you own the home, you have only good news.

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    I see that it's now more difficult to get home loans. More stringent lending criteria related to negative gearing. Interest rates may actually rise by over half a percent...who knows what's going to happen!


    Sorry Tamara,


    Interest rates in the next 10 years are not going to rise. There is 90% probability that they would not rise in the next 20 years.


    Interest rates rise when economy is doing good. Share of the manufacturing in Australian economy after 2017 is going to start with 0.


    Farming - well, with another El Nino coming in (means drought) do not expect much revenue from there.


    Normal Governments under the conditions when resource based economy enters the phase of mining bust, and when main consumer of mineral resource China is on a brink of crisis would introduce preventive economic stimulus.


    Our super talented Government is stuck in paranoid delusion about delivering "surplus", i.e. worsening business conditions by raising taxes and restricting access to capital. There could be no other result but economic demise.


    Which in turn means lower rates. Our rates should have been lowered to 0% five years ago. Postponing the cuts means rates would be cut lower and held at 0% longer than normal.


    I think thanking to the manipulation with stats RBA is oblivious that country has already fallen in the deflation pit. Japan for exaple can not make its way out of deflation for decades, despite manufacturing there is MUCH stronger than here.


    As I said before, whole first half of 2008 media was trumpeting "double digit interest rates". This is at ther time when it was blatantly clear that rates are heading towards 0, and all the RBA rate hikes are no more than bluff.

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