Monday, August 22, 2011

The Block final show affect on property prices

I have been a regular watcher of the Block on channel nine and also very interested in housing estate bubble in Australia. When I first came back to Australia last year I was amazed at the number of houses being renovated. I also believe that housing industry has a significant impact in the Australian economy.

First off I am of the belief that world economy has already reached the tipping point and we are in the process of a financial reset which will affect all countries including Australia. I am not sure how this is going to affect Property markets only that their will be a major change.

What I am sure is that after 3 million Australians watched the block last night, they watched months of resources and effort going into renovations and still they were not able to meet the reserve price. This will have a significant affect on peoples psychology, first that it is another confirmation that property prices are declining and property market is moving lower but more importantly to the housing industry that renovating a house has little impact on property prices.

The person who bought Polly and Woz house seemed to me to be to close to the person running the auction, so I really don't think it was a normal buyer. What amazes us is that the house/block we own and am currently living is larger thane all the houses combined but valued at one third of the price. Also it would take us less then one hour to drive to that location in Richmond.

If I was a betting man I would say this is the tipping point that will be shown to pop the bubble in Australian Housing market. If I was a potential buyer I would put the money in Physical Gold and Silver and rent which I have been saying for more then one year on this blog.


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