Summary
Basic instinct of human beings - at the slightest downturn in the price buy.It is a bargain!
Analysis
Housing is one of the eternal trinity other two being Food and Clothing. Recession or the global financial crisis is a blessing in disguise to many in positions of stable employment.It gives an opportunity to buy hitherto high priced houses at bargain prices. Another reason for the pick up in the mortgage approvals could be the fear of increase in prices. When the house prices have plateaued i.e not fallen for a period of time, then the fear of the unknown takes over and there would be a rush to buy to prempt any possible increases. Add to this the fall in interest rates and you have a recipe to fulfill your basic desire - own a house and build a home.
Housing market upturn could be the trigger to boost the economies of the world. Because many industries are intertwined to the housing market.And it is hoped this will lift the economy as whole.
Much has been written about the global financial crisis and it has been going on for the last two years or more with a sudden downward spiral starting mid 2008. With the Governments all over the world responding with stimulus packages to ward of a potential recession and house prices falling, it is the best time to buy.
Consider Australia, where the Government increased the First Home Owners Grant as part of a stimulus package sending mortgage approvals through the roof.And people took advantage of low house prices.This helped Australian economy to show a positive 0.4% growth, the only economy in the developed world to be in the black.A tough ask at this time.
Possibly other economies will follow suit and hopefully normalcy will return. Cheers.
