All things considered, the Australian housing market looks ready to dive. My conversations with real estate agents are the only ones they've been having - no buyers are willing to even make a call at the moment. Home lending is down, prices are taking a u-turn, sales are down, and first home buyers are lost somewhere in the mist of winter mornings.
There has been some interesting analysis from Steve Keen lately, along with the more spruikung from renouned pro-housing, anti-commerical property, anti-shares, anti-all other investments, man on the spot Chris Joye.
My outlook – a surprise drop in home prices leading a significant decline in economic activity in Australia. The Reserve Bank will act promptly to reduce interest rates while pointing fingers to troubles abroad. Bulls will then promptly join the finger pointing, noting how exceptional strong Australia’s housing market has been and the supply shortages still threaten to create future unaffordable housing.
Aspirational home buyers should take a look at a true financial comparison of home ownership and renting before making any major decisions.
The Australian dollar will not be safe. Think September 2008 all over again.
Two new blogs worthy of mention are Delusional Economics, where you will be enlightened by some straight talking no-nonsense commentary, and a special mention for the Unconventional Economist for some very high quality articles on the Australian property market.
My attitude on helmet law rebound effects has been seen as quite controversial. But for those interested this site articulates my position quite accurately.
Experience shows helmets give only limited head protection. Studies in Australia show some prevention of superficial injuries (such as scalp lacerations) but only marginal prevention of “mild” head injuries and no effect on severe head injuries or death. When helmets were made compulsory in Australia, admissions from head injury fell by 15-20%, but the level of cycling fell by 35%.
To summarise, helmet laws led to a major decline in cycling. Fewer cyclist on the road decreased awareness of them by drivers, leading to cycling in general becoming less safe. Further, helmets themselves offer limited head protection in a limited number of crash circumstances - a helmet doesn't help much if you go over the handle bars and land on your face for example. And if you get hit by a truck (the classic pro-helmet argument) you are stuffed whatever you are wearing on your head.
THE LAST WORD
If the financial and economic circus of 2009/10 has been all too mauch, it might be time for a holoiday. For those who take this advice but want to optimise their holiday time, have a read of this quality article.