Sydney set for housing “golden decade”

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Ah yes, we’re definitely approaching some sort of peak. Yesterday we had Harry Triguboff framed as the new BHP in an endless property boom and today it’s a Stockland apotheosis:

Sydney is entering a “golden decade” of housing growth, with no bubbles in sight, according to Stockland, one of the biggest residential developers in the country.

Chief executive Mark Steinert said the “gross” undersupply of homes will not see Sydney hit market equilibrium for at least another five to six years.

Mr Steinert, who is the new president of the Property Council of Australia, said within NSW the markets differed, with the Illawarra region showing solid growth in demand and pricing, Sydney is about high density in the city, while the Hunter Valley has been slow.

Gotta love that supply and demand equation, never mind the economy! The same soaring rhetoric was very much in evidence in California just before the US housing bust turned an apparent shortage into a gigantic glut.

My base case is Sydney has about 18 months before prices are outright falling as the mining super cycle continues to unwind and the world economy slouches towards the next global shock.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.