There has been no end to the publishing of doom and gloom regarding the "Housing bubble" that is about to burst in Australia. I cant see it happening myself due to one major reason which is the supply and demand situation, also I have yet to find any information for Property investors detailing what would actually happen if our properties were to fall in value by 40%.
I am trying to stay positive and have tried to simulate what would happen to my own portfolio if this was to happen, i have used the US marked crash as an example – If Aus properties fell 40% the following would happen (my opinion)
Interest rates would fall to approx 2% making the repayments for a $300k property (now worth $180k) approx $500 month.
Most baby boomers who have IP's and are a couple a years away from retirement wont be able to retire because there super is still worth half of what it was due to GFC and will become more reliant on the government (a very poor government).
Rents would increase due to the unfortunate people who lost jobs having to sell and move into rental propertiesI would like to know that if this was to happen and you were lucky enough to keep your job – how will this affect property investers in the long run (say 10 years) – wouldnt this become an opportunity to by cheap properties with high rental return (like in the US now)
I would love to get your thoughts on this one – what would happen to a property investor if the bubble does burst?
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