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This is Why Australia Hasn't Had a Recession in Over 25 Years (bloomberg.com)
Australia is close to seizing the global crown for the longest streak of economic growth thanks to a mixture of policy guile and outrageous fortune. From a report: While growth is being underpinned by population gains and resource exports to China, failure to spur productivity has meant stagnant living standards and electoral discontent; a property bubble fueled by record-low interest rates has driven household debt to levels that threaten financial stability; and a timid government facing political gridlock could lose the nation's prized AAA rating as early as May because of spiraling budget deficits. Australia's last recession -- defined locally as two straight quarters of contraction -- occurred in 1991 and was a devastating conclusion to eight years of reform designed to create an open, flexible and competitive economy. But it also proved cathartic, paving the way for a low-inflation, productivity-driven expansion. As momentum started waning, China's re-emergence as a pre-eminent global economic power sent demand for Australian resources skyrocketing, helping shield the nation from the worst of the global financial crisis. But the post-crisis return of the boom proved ephemeral, failing to boost government coffers and pushing the local currency higher, eroding competitiveness and driving another nail into the coffin of a fading manufacturing sector.
Complete right wing rubbish, the reason we got thru the GFC without recession was the governments prompt stimulus actions at the time.
The housing bubble is not due to supply, there are many vacant investor properties, it is the ridiculous negative gearing tax dodge that is fuelling the housing price problems.
It was our first house, and my partner was a lot more risk adverse than me. She insisted we be prepared for one of us being out of work and interest rates doubling. Both happened. I changed careers to IT and it took me nearly 2 years to get work, while interest rates went from 9% to 18% in a matter of months.
We managed to pay the mortgage and keep the house, but it was not a fun time.
To know that you know what you know, and that you do not know what you do not know, that is true wisdom. --Scooby Doo
I've posted this maybe dozens of times across the internet, I'm tired of shouting it and I'm tired of making lengthy posts with links and evidence.
The country is selling all it's gas, minerals at rock bottom prices to anyone and everyone for a start. In a huge massive way. The mining boom is finally slowing down significantly, at least so I hear.
We are also pretty lax with stopping people buying property. There's arguments why shouldn't we stop them, but seriously, I'm sick of debating it. If you can't see how someone vastly wealthier than the common local, bidding for houses isn't going to mess up the cost for the locals,..... well I don't know what to say. There's a reason Thailand, Indonesia, other smaller second class countries don't let foreigners buy.
We're getting 'Vancouvered'. It ain't about race, it's about economics and the locals (who don't own yet, you know, a LOT of people) are getting destroyed, totally by this.
That's the facts, it's as simple as that. Furthermore, as long as the Chinese can still buy property (and they do it legally and illegally) then I suspect the 'crash' which I've hoped for, for a decade, simply won't come. They'll just see a cheaper place to store their money they want to hide from China.
We're boned. Best benefit to all this would be a property developer in the last 20 years. Rest of us? Well I've held off using expletives but to say I'm white hot raging angry would be an understatement. @$#%^ our governments.
Most of what you wrote is complete and utter bullshit. The majority of the bad loans weren't even written by banks, they were written by loan companies which were under no obligations to provide loans to anyone for any reason. You blame the government, but the banks would have done it anyway in the quest for profits. Sub-prime loans were extremely profitable, and as long as the housing market continued to rise, they were almost risk free because whoever owned the loan could foreclose on the house which would be worth more than the loan on it. The shady side of the subprime loan industry was the belief that even if they offered loans to people who likely couldn't pay, the lender could take their money until they couldn't pay any more and then steal the house for resale (and a quick profit) when they failed to make payments.
The government didn't have to force them to do anything, they hung themselves with short-sighted greed.
Fanatically anti-fanatical