Australia: With the First Homer Buyers Grant stimulating the biggeebers out of the bottom end of the real estate market, the stock market sputtering out noticeable gains and less notable declines; have we seen a slowing of the recession we almost had?
Far from it, while First Home Buyers have given some real bounce to the real estate sector, they are simply driving up home prices in regions that in 2007-08 witnessed drops of 40% in values. Robert Henry of Statewide Realty, St Marys, in Sydney’s outer west (43% price drop) has noted that ” taking into account the drop we’ve seen over the past 3 years, clawing back 30% in value through First Home Buyers is hardly a resurgence”
The concern is that the consumers that can least afford debt at the moment and the initial cause of this current downturn are once again stimulating the economy. We note that Westpac has a Fixed Term Home Loan (10 years) at 4.8%, responsible banking?
It would be easy to flipantly smile this away as more doomsaying, we are Still in the midst of volatile financial times and while it is expected the share market will fluctuate, easing on and of the go button, the housing market is not built for short term gain. Mortgagees commit for an average of 25 years.