We’re a long way from the woes of the world here in Sydney’s Upper North Shore. In particular, the national debt crises dawning elsewhere.

These are serious problems and developed-world growth will be a long uphill struggle. For many governments, deficits will consume spending and it will take the best part of a decade to bring unemployment back down.

But the problems are not quite at the scale of the Global Financial Crisis. That crash followed a debt-driven investment boom, as happened in the 1980s.

Here in Australia, we were not party to over-investing in the boom that preceded the GFC. Our banks remain strong and have minimal exposure to countries now under threat of sovereign debt.

Three-quarters of our exports are Asia-bound. China is in surplus and will continue looking to Australia to contribute to its growth.

Household saving is a precautionary strategy and businesses are holding back in the face of uncertainty. Many are in cost-containment mode and not investing for growth. Yet moderate growth we have.

Australian businesses will soon hit capacity constraints and switch out of survival mode, triggering private investment and underwriting growth. And households will loosen the purse strings.

For Australia, the cycle has hit bottom and will soon reverse. Current global financial turmoil is delaying recovery. But it’s just a delay. Growth is imminent.

For property, not enough is being built and much stock is trading below replacement cost. Property remains a low-risk, high-return proposition.

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