Widely respected business and financial commentator Peter Switzer, has challenged the media on some recent negativity around the economy and property market, indicating he is optimistic about house prices and debt-servicing abilities.

Mr Switzer said to be cautious of doomsday negativity, especially after many experts tipped depression-like outcomes from the global financial crisis. People were pushed into term deposits as the safer option which were at about 6%. Now, over the time they had their money locked away they would be lucky to have gotten a 30% overall return.

Interestingly, if at the same time, investors had bought good property in Sydney or Melbourne in 2008, or bought in the stock market index (as opposed to term deposits), their investments would have shown returns of 100%+.

A former Reserve Bank of Australia board member, Dr. John Edwards takes the opinion that interest rates will rise quicker than other economists believe (the most indicating it will be about a year). He thinks the official cash rate should rise 2%, from 1.5% to 3.5% in a short two and a half years. However, he did indicate this could actually be 5 years down the tracks, and even when we get there, Australian households will still be able to cope.

With regards to the reported potential crumble in housing prices, Mr. Switzer recalls during the 1991 recession, when unemployment hit above 10 per cent, prices did not tumble.

He states when the banks are doing good, the economy is not doing as badly as some of the media would like us to think. Commonwealth Bank shares have shown phenomenal growth since 30 January 2009 with a 186% increase; growing from $26.75 to $76.66 this week.

The full article can be read by at the link below:

http://www.switzer.com.au/the-experts/peter-switzer-expert/more-housing-bs-but-please-read-entire-story-before-tweeting/?utm_medium=newsletter&utm_source=switzer-daily