Nightmare vision of 2014 property crash

Date
    February 14, 2014


American economist and demographer Harry S Dent jnr says there is a bubble in Australian house prices and we should brace ourselves for a spectacular collapse sometime this year.      

    Have US experts missed the point about Australian property?

Dent is in Australia to speak at seminars and to promote his book, “The Demographic Cliff”. He says that house prices are unsustainable and will fall by at least 27 per cent in Sydney and Melbourne over the next several years.

    Your real estate is so high it has to come down.

Dent told Money in a video interview that the trigger for the collapse of Australia's house price bubble will be the bursting of the Chinese house bubble.
How high can property go?



Dent says Sydney and Melbourne property markets are being held up by foreign buyers and that cannot last forever.      


“China has a bubble [in house prices] that makes Australia's look like nothing,” he says.

“I think China's bubble is going to burst and I cannot see any way that Australian property prices can keep going up," he says.

If his forecasts do not come true it will be because governments “wave the magic wand and kick the can down the road again”.

The Reserve Bank of Australia and most Australian economists say there is no bubble in Australian house prices. But Dent is sticking to his guns.      

“Nobody in real estate development or government can afford to say that 'we have got a bubble',” he says. “They will always say it is not a bubble”.

But what of our special factors - we are a very large country with a unique economy and most of the population concentrated in a few conurbations - don't they count against the general rules for bubbles and their ending. Dent says he has studied every bubble in history and every time a bubble comes whether it is in tulip bulbs, gold, stocks or housing they are always described by those on the inside as being different, and unlikely to burst.

“I am saying that China has the biggest [bubble] and that is going to trigger [the bursting of] your bubble. Your real estate is so high it has to come down in the next few years."          

Read more: http://www.smh.com.au/money/investing/nightmare-vision-of-2014-property-crash-20140213-32kl2.html#ixzz2tFIUTVkZ

The only thing that triggers an housing crash is a dramatic change in the ability for people to buy houses.

Abbott has started that trigger by increasing unemployment.  But it would probably need to get to 10% before we'd see a crash, and it would need to impact the "Sydney sectors" such as building and professionals.

Sir Spot of Borg wrote on Feb 14^th, 2014 at 9:29am:


WHICH AREAS    ??? Do you have a LINK?  Or is it only in your mind   

aquascoot wrote on Feb 14^th, 2014 at 9:21am:

Want, not need.

Sir Spot of Borg wrote on Feb 14^th, 2014 at 9:35am:



Mount Morgan a population of less than 2500 people with no real employment oportunities since the mine closed in 1981 and you seem surprised that when their house prices go down and not one network finds it 'news worthy'.

The reason Mount Morgan's real estate crisis in not news worthy, is that no-one gives a bugger about Mount Morgan.

Sir Spot of Borg wrote on Feb 14^th, 2014 at 9:35am:

Mt Morgan not exactly a hub, more like a broken spoke!

My wife thinks that place needs a blood transfusion   

Sir Spot of Borg wrote on Feb 14^th, 2014 at 9:47am:



Yeah, no-one gives a sh1t about dropping house prices in the Sth Burnett either, so also not news worthy.


When a city with it's own news service has a massive plummett of prices, it would be newsworthy, but podunk backwaters, not so much.


When brisbane, sunny coast, goldie, townsville cairns mackay or rocky take a double digit tumble it might make the news then.

Sir Spot of Borg wrote on Feb 14^th, 2014 at 9:35am:



The house that Centrelink built......