When will Sydney property market going to crash ?

Yeah ok not sure where you learnt your economics study but raising interest rates by 2% in rapid succession in an already declining and struggling economy will not happen. I take you are not an economics or business major.

Think about the consequences for a minute or quickly do a google search and learn economics 101.

 

You just don't get it do you.

The situation I am describing will be because of market forces, and market rate rises from offshore.

The whole world is not controlled by central
Banks.

Go google tail risk or read Black Swan, that's enough free education for you

 

Yeah no worries mate. I hope you make millions in the future.

 

Thank you. I hope you continue to have blind faith in central banks, and good luck with your studies

 

Interesting discussions in your threads @DowntownBlock, some bits here and there are informative. You do have the knack of ******* most people off though!

 

Yep, reminds me of grumpy old white man. The view is ingrained and con not be changed or worth attempting to.
The history of Sydney simply does not agree and I'm talking the last 30 years albeit its different now. Although I must ask if we don't look at history and use " its/we situation is different now" than we are all in a new territory and if in 30 years Sydney has not had years of corrections or severity that people like Downtown profecise than talking from a highly educated cut and paste intellectual ability isn't going to cut it.
(was trying to break record for longest sentence)
Hey good news I Joined this forum just to express my view to Downtown. Without him I would be just a casual reader now I plan to be more active.

 

White man? What do you mean by that? What is relevance?

 

Most good discussions elicit an emotional response. If I am ******* off individuals like the above guy I actually think I am on the right track!

He just needs to change his name to elusive dreams

 

I remember the recession we had to have & what it did too people, when rates move due to an agenda or reactions or whatever, your just a statistic.

People do not like discussion on what if, or where things could go wrong, but people should weigh up each side of the equation.

There are indicators that rate rises talked of above are realistic, I also recently saw an ex board member I think it was, say in plain terms, rate rises are coming.

 

We have been lulled into a false sense of security in Australia,
Imo the sooner rates are lifted to trend the better, I dont think people realise the vulnerable position we are currently in with rates and other economic indicators sitting so divergent to historical levels.

 

What options could the government offer banks to keep rates low?

 

Banking Royal commission

 

If, or given President Trump's rhetoric when, US Federal Reserve raises their rates it will affect Australia regardless of our economic situation. A two percent rise is possible. A rapid devaluation of the AUD to USD can affect Australian mortgage holders rather quickly. There's not much the RBA can do other than warn people at this point. I personally think they should raise interest rates and encourage saving and intelligent investing.

 

It's not healthy for banks to keep rates low. It encourages high debt and zero savings. Low rates for a short period make sense but long term they skew the economy. Banks are in the business of making money. A Royal Commission is more likely to find that rates should rise to discourage high risk property debt than anything else.

 

Im not sure this type of recomendation would be within the scope of an RC, as the basis for rates is some what set by RBA/Libor. It might be within the scope to question lending practices to investors to access markets that are sitting on insanely high P/E's or the amount of leverage afforded?

 

'Many will need to sell': Citi analysts issue grave property warning for investors

“Tighter application of responsible lending laws means that investors must now have a clear debt repayment plan, although for many prevailing interest-only borrowers this does not exist.

“The large levels of debt outstanding by borrowers aged in their 50s and 60s means many investors will need to sell property to discharge their debts.”

 

In a world of automation less and less people will have a job,
Can I ask where you think the market demand (Labour market that is) will come from?

I believe like France Australia will become a mainly Services labour employer outside the likes of Health,Construction and lesser extent resources.

But if what I assume is right and we will not need people as much in 20 years to come. How will employment grow? How will wages grow?

This is why I think money will stay cheap for a while.

I would love to understand more. I don't have any economics education behind me.

 

The Fins are all over it:

Episode 796: The Basic Income Experiment

 

Article by Richard Holden, Professor of Economics at the UNSW Australia Business School.

Contains some very disturbing insights and opinion held by ANZ chief executive officer Shayne Elliot.

There are spooky signs of risk in the property market — and the banks are ignoring them - ABC News (Australian Broadcasting Corporation)

"And APRA's "crackdown" and the Reserve Bank's warning may be far too little, way too late.

We might stumble through this. I hope we do. But if so, it will be because of dumb luck, not good institutional and regulatory design. And definitely not because of good corporate governance."

 

Nearly always things are done in a reactionary way, agree, we have just been lucky, indeed the world may have been lucky, the can is just kicked further down the road, but we may be at a point where that is all that can be done, short of all out war and reset, which may come as well.