ATAR Notes: Forum
VCE Stuff => VCE Business Studies => VCE Subjects + Help => VCE Economics => Topic started by: monkeywantsabanana on March 20, 2011, 08:25:53 pm
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What are the major challenges or problems facing the property market over the next few years?
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Haven't touched on this in economics whatsoever. But, this is just my opinion, so take it with a grain of salt.
The property market over the years will eventually reach its peak, if not already, and if the property market continues to increase its prices for its houses, and people continue to buy those houses. Then, eventually, if interest rates goes up for instance, or people buy houses that they cannot afford --->
This can result in the property market bubble bursting.
In other words,
If the bank is continuously lending money to people to buy houses ---> People can't pay back the monthly payments + interest rates due to an increase in interest rates or housing prices----> Many people have the same problem ---> Consumer Confidence Goes Down ---> Defaults on payment --->Homelessness/ Unemployment Goes Up ---> Kaboom! Similar to what happened in America, except more things occurred than just that.
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Haven't touched on this in economics whatsoever. But, this is just my opinion, so take it with a grain of salt.
The property market over the years will eventually reach its peak, if not already, and if the property market continues to increase its prices for its houses, and people continue to buy those houses. Then, eventually, if interest rates goes up for instance, or people buy houses that they cannot afford --->
This can result in the property market bubble bursting.
In other words,
If the bank is continuously lending money to people to buy houses ---> People can't pay back the monthly payments + interest rates due to an increase in interest rates or housing prices----> Many people have the same problem ---> Consumer Confidence Goes Down ---> Defaults on payment --->Homelessness/ Unemployment Goes Up ---> Kaboom! Similar to what happened in America, except more things occurred than just that.
Is this the reason for the cardboard box plan in your sig?:P