Will falling house prices trigger the next Aussie recession?

You're showing your age @Stoffo - Miranda Fair was renamed Westfield Miranda in the 1980's

 

I can't see what the fuss is about. IO loans are rolling every day . They will not all roll at once in 18 months time.

It happens every day and I bet most are refinanced.

The media needs a story. If its not the Druitt then it's the IO loans or the bogey man.

 

Lots of people are just paying the P&I. I have one IO loan left. It's not due to roll until 2020 but I'm thinking I will just switch now for the better interest rate and all.

 

I don't think falling house prices will cause a recession. The two things operate separately in that that when the housing market stops going up, people can still buy food, clothes, cars, holidays and so on.
But in contrast - a recession would probably cause property prices to contract. If people lose jobs in large numbers, or wages stop growing at or above inflation, and people stop generally spending money then a lot of the money that was available for buying property disappears out of circulation, so demand and ability to buy property declines.

 

I still go to Miranda Fair looking for Grace Bros. Still forget it's been Myer for 20 years

 

Sometimes in life , if you want to go forwards , you have to go backwards first, as it gets rid of the dead wood.
Look what happened after the last serious recession that we had in the early 90s, it set us up for over 20 years of good growth.
But it did come at a cost , and I was reading somewhere something like 25-30% of investors sold up and moved on as interest rates rose by about 60-70% from the decade lows and they struggled with repayments, this was in an era when rental yields were around 7-9% and P&I loans only.

 

Stop being so optimistic. Don't know you 'Doomsdaying' is all the rage nowadays.