WE ARE IN A GLOBAL DEFLATION ENVIRONMENT - APPARENTLY - BUT WHO IS LOOKING AT HOUSE PRICES ( NOT THE GOVERNMENT) Interest rates: (Cash Rate) Set every month by your Reserve Bank is determined by employment, economic growth and Inflation: Inflation: by definition is the cost of goods and services price increases or decreases. Deflation: by definition goods and services prices are falling - what this means ( Your economy is not growing and hence demand for you goods is weak, thus driving down prices - therefor you are close to a recession technically. The reason why your home loan interest rates are so low at approximately 4.7% - is because we are in a global deflationary environment and historic high unemployment across all countries. YOUR GOVERNMENT RESPONDS BY: Federal Reserve reduces interest rates to get the economy going, and increasing demand with low borrowing costs, thereby your inflating prices. NOW MY VERDICT: HOUSE PRICES GLOBALLY ARE AT RIDICULOUS HYPER INFLATED PRICES. - so why are governments trying to increase inflation with low borrowing costs. Theoretically - you do not try to increase inflation - as it makes life to expensive - as it is now. Unemployment - is to high, so THE GOV has a dilemma - keep house prices increasing with low home loan rates for invest. Reasons - why you house is costing to much._______________ 1. Governments are selling Special Visas - for investment in property. (THE CORE PROBLEM) 2. Historic Low !!! Home loan ratse. 3. Globalisation - and cross migration from India and China into smaller economies or states. INCONVENIENT SOLUTION: GOVERNMENTS NEED TO STOP SELLING VISAS FOR PROPERTY INVESTMENT. This should slow down the prices increases.
Posted on: Fri, 14 Nov 2014 05:41:20 +0000
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