I dont think there is any reason for our property to fall that much, I am no expert but in China, Dubai, etc. the prices of real estate was totally overvalued - hence the 60% decline, here i dont know if we have the same level of overvaluedness? Our banks are awesome as well - I think they will pass stress tests. Have you guys ever read/researched Canadian banks - they also very cool!
Ah John, making people feel all warm and fuzzy. If you look at the average house price and the average household income houses are still overpriced in this country. Short of something (perhaps a very aggressive rate rising cycle) to trigger forced sales I expect houses to drift sideways which will in real terms drive house prices lower. I do think our banks would be a lot better off than their european and american counterparts but that said I suspect there would be a lot pain and suffering cause there are lots of dubious loans on the books.
thing is if we're looking at alternative possibilities for the future, we have to base them on some facts, rather then merely fears .. an as my wife consults to DLA on land policy (and mosty wrote the white paper) the facts as they stand don't support whole sale land grabs .. could that change - sure .. but then queen liz could start land grabs as well, certainly been done before by her family ..
well Thats very intersting about your wife involvment.... My Brother is in a huge tis after having seen the film about Zim's land grab..I am sure he would love to chat to your wife. As he now has a be in his bonnet....The question Simon at the back of everybodys minds is why did SA sit back and let what was an obviously ratialy motivated land grab happen on their door step despite many politians having had first hand experience of being on the recieving end...unless they some how suport such a practice...Personally I have three friends who lost farms.
Here's how I see the 2 scenarios for property deflation: Political - Could be due to a political direction the government took and made all the "bloody agents" leave the country. ANCYL has stated that residential property (even multiple properties owned by one white man) won't be threatened, it's farms and the minerals under the ground they have their sites on. So only moderate risk there, but property deflation will only be a symptom of other bigger wounds in the economy in such a scenario. Economic - double dip or worse than a double dip pullback with global business grinding to a halt and nobody having jobs. Moderate risk there as well, but banks would then need to worry about other factors first like no liquidity, loans made to businesses, etc. IMO the tests are nonsense as you can only test for the conditions you can foresee, it's Rumsfeld's unknowns unknowns that's the real black swan here. But markets now go ahead and treat it as the holy grail.
the reason they sat back is easy .. savong face, ignore it an it may not seem so bad .. banding together, we see it all the time in global orgs; AU, G8/G20, EU etc .. look what happened in Greece an how eventually the EU bandied together and pretended everything is alright .. yet greece still going to default, just not this year ..