Morgan Stanley describes huge apartment bust

Thursday, 20 October 2016

From Morgan Stanley on the building apartment glut:

Peak housing conditions have passed and consensus appears too complacent about the slowdown. Our proprietary new Housing Cycle Indicator (MSHAUS) highlights growing risks from credit rationing and apartment settlements. Weaker fundamentals limit scope to buffer the cycle.

A Peak Has Passed: In September 2015, we flagged a weakening of housing supply-demand fundamentals and the impact of tighter macroprudential policies. Here, we assess the continued slowdown of the housing market, in the context of a building oversupply and apartment settlement risks.

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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.