Housing crash Down Under?

[marmar]

(Bloomberg) Australia, where home prices are falling at the fastest rate in more than two years, may have a glut of properties and be set for a U.S.-style crash.

The warning from tax-reform advocate David Collyer, commentator Kris Sayce and academic Steve Keen contrast with banks and developers that say a shortage of about 200,000 homes will underpin prices. The housing bears say builders and lenders are pushing flawed government data to keep prices afloat in the English-speaking world’s costliest place to buy a home.

“It’s important for the government and banks to keep the myth of a shortage alive,” said Sayce, editor of Melbourne- based online newsletter Money Morning Australia. “Without it, prices drop, and negative equity results in housing repossessions and insolvent banks.”

More than two-thirds of the government’s shortage estimate arises by including people who can’t afford housing, such as the homeless or those living in trailer parks, Sayce said. Collyer at tax-reform lobby group Prosper Australia says there’s actually a surplus of more than 250,000 dwellings after 15 years of overbuilding, while Keen argues the shortage estimate is swollen by inflated demand from handouts to property buyers of as much as A$21,000 ($22,300). ..........(more)

The complete piece is at: http://www.bloomberg.com/news/2011-09-11/housing-bears-say-shortage-myth-means-australia-set-for-crash.html

[xchrom]

1. Recommend

[Number23]

2. The only sentence that really stands out

"Australia has the most unaffordable homes in the English- speaking world, Illinois-based consulting company Demographia said in January, with homes costing 6.1 times the average annual income."

That truly says it all. Housing (and every damn thing else) is just outrageous.

[ProgressiveProfessor]

3. Worse that London, or the UK?

That is scary

[Number23]

4. I met a 26 year old girl who was a first time home buyer

Lovely little 2 bedroom house that she bought. Nothing fancy at all. Hardly any yard. Not in one of Australia's major cities.

She took out a first time home buyer's loan to pay for the cost of this house. How much, you ask? Over $350K. She'll probably be paying for that house for the rest of her life. The guy who mows our lawn came and mentioned that his house is half the size of ours and he paid half a million dollars for it. (For his sake, I sure as hell hope that he was exaggerating about the size of his house.)

But considering a bunch of bananas is $9 here in Australia, I shouldn't be so surprised. One of the reasons I just shake my head when I see people talking about how horrible things are in the States and how they wish they could go somewhere else. There is something to criticize EVERY SINGLE NATION on this earth over.

[ProgressiveProfessor]

5. Damn....just damn

In our travels we spent some vacation time in Australia but were never posted there. No idea things were so expensive.