What is most fascinating about this book is how the parallels with other bubble-busts are clearly illustrated but these parallels are being ignored by the custodians of the economy in Australia.
Having gone through one property crash makes you more sensitive to the variables when another is possibly pending. Australia is an open economy greatly dependent of export of primary resources for much of its success. It is an incredibly high cost economy in which to live or do business. By normal yardsticks its residential property is overvalued - by how much is the great conundrum. A major external shock could have a massive impact and could decrease property prices by 10-50% in a short time. On the other hand that shock may not come, or if it does it may not be as shocking as feared, Australia's government debt is still relatively low and the country could withstand some significant borrowing if pushed. However, the budget deficit is a major concern and if government revenue fell off a cliff then the economy could be in very serious trouble. Strangely this has happened in several developed economies elsewhere in the past 7 years but there is no debate going on and that in itself is scary.
Most fears are not real and this crash may not happen, but if it does the RBA would rightly take alot of flak for not reining in bank personal and property lending. Mr. David clearly shows that excess credit drives up property prices and that fact alone should be taken very seriously.
- Format: Kindle Edition
- File Size: 871 KB
- Print Length: 228 pages
- Page Numbers Source ISBN: 1497503868
- Simultaneous Device Usage: Unlimited
- Sold by: Amazon Australia Services, Inc.
- Language: English
- ASIN: B00JJ7UW0S
- Text-to-Speech: Enabled
- Word Wise: Enabled
- Customer Reviews: 77 customer ratings
- Amazon Bestsellers Rank: #192,368 Paid in Kindle Store (See Top 100 Paid in Kindle Store)