All Topics / Help Needed! / RTC vs. the current housing crisis.

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  • Profile photo of MikebishopMikebishop
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    @mikebishop
    Join Date: 2010
    Post Count: 6

    RTC vs. the current housing crisis. Huge profits were made in the wake of the RTC crisis two decades ago. Will residential real estate experience a similarly dramatic turnaround?

    Profile photo of heathersheathers
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    @heathers
    Join Date: 2010
    Post Count: 26

    I was only a whipper snapper back then so what’s RTC?

    Profile photo of LHLH
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    @lh
    Join Date: 2010
    Post Count: 97

    No doubt there'll be a lot of opinion on this, but my opinion is that it won't be anything like what we had in the recession. You can have a look at the economic outlook pieces available with ANZ to see what they have to say about the matter.

    My thoughts are it won'r be as worse because:

    • Monetary policy very different now to what is was 20 years ago.
    • Government has seen what has happened in the past and will do what it can to avoid this situation again.
    • Population growth vs Home construction and there is a massive undersupply in homes, whereas 20 years ago it was almost an oversupply
    • Higher rates are slowing the market but rates are still at what we would call long range “normal levels”.
    • Even though clearance rates are low, we're seeing investors take up the slack from the drop-off in first time buyers.
    • Home “upgraders” are still active and should remain so.
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