How are people coping with finances world wide being stretched .
I had been saying for years that in the uk it was only a matter of time before the bubble burst and it sadly happened . House prices etc were rocketing and it was getting silly and the bubble finally burst . Yes the war in ukraine didnt help but it was only partly to blame for world financial troubles . Banks and governments were asleep at the wheel for far to long and what is happening was inevitable . House prices are dropping but rents are still rising with landlords trying to hang on to properties but this is gonna end I reckon by xmas with people landing in negative equity and ending up losing their homes . It happened 20/ 30 years ago and its happening again . The only good thing that might come out of it is that house prices will drop to sensible levels again and rents will eventually come down we just have to bear the pain till it happens . When house prices started to climb rapidly to silly prices it was only a matter of time . For example a relatives house went from 250 000 to 750 000 in just over a year . Now its dropping but still over 500 000 and dropping . When good times get silly good you know sooner or later something is gonna break and it did .
Here in Australia its not completely the same. Our Reserve has slowly increased the cash rate, which in turn adjusts our variable mortgage rates (by far the most common mortgage type). Its been a bit like boiling a frog; the water temp is rising and the frog keeps acclimatising to the new temp. The mortgage rate is going up and despite wage stagnation for nearly two decades Australian's are finding a way to still cut back elsewhere and meet the new monthly mortgage payment...for now. Each month the Reserve meets there are dire warnings about mortgage stress and default risks, but it just doesn't happen...
To me, Australia's and other nations' governments appear addicted to an immigration-fuelled Ponzi scheme to keep up GDP growth (the per-capita figures are less stellar) and boost income taxes to support pensions.
Apart from being unsustainable at the current rates, it causes a large increase in housing costs as infrastructure fails to keep up and runs the risk of the imported cultures reaching a critical mass that changes the face of the nation.
I'm okay, but the next generation is likely to find things tougher than I did.
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