Bubble war rolls on

From Sydney Morning Domain:

Doomsday property scenario authors Lindsay David and Phillip Soos warn of serious danger ahead for all Australian capitals in their submission to a home ownership inquiry, which starts on Friday. They say the  “housing prices across all capital cities remain grossly inflated relative to rents, income, inflation and GDP”.

…But St George Bank senior economist Hans Kunnen says there’s only one thing that can create such a crisis – a large number of Australians being forced to sell their homes – and the warning is misguided.

He said it would take a serious recession for the pair’s scenario to come into play. “I mean unemployment rates going up to 8 per cent so people are forced sellers,” Mr Kunnen said.

…Of the warnings, AMP Capital senior economist Shane Oliver says he’s “heard it all before”. Although he agrees that house price ratios to rents and GDP are “very high” – “I wouldn’t say grossly” – he says the Australian housing market is “significantly undersupplied”.

…Domain Group senior economist Dr Andrew Wilson described the pair’s grim warnings as “quite hysterical” as the only oversupply issues were of apartments in Melbourne’s CBD because of a building boom. Other areas were undersupplied.

A few points:

  • if only 8% unemployment is needed to cause a property “bloodbath” then I  suggest we all prepare for it;
  • undersupply does not prevent rapidly falling house prices, as economics 101 tells us, Shane, and
  • why would anyone mistake Andrew Wilson for a balanced opinion?

Which leads back to where we started, with a huge bubble sailing into a perfect economic storm as monetary and fiscal policy runs out of bullets approaching the end of the business cycle.

Houses and Holes

Comments

  1. 14th of April, 1912, the Titanic received 7 separate warnings of icebergs in the vicinity. By the fifth the time Captain Edward Smith was heard to remark “I’ve heard all this iceberg talk before”

  2. “Of the warnings, AMP Capital senior economist Shane Oliver says he’s “heard it all before”. Although he agrees that house price ratios to rents and GDP are “very high” – “I wouldn’t say grossly”

    61% overpriced against rents is not “grossly”, Mr Yellowhair?
    WTF is?

    Good to see Linzcom finally enter the fray
    “What these housing markets experienced was artificial demand generated by their banking and financial systems, having lent colossal sums of private debt to speculators to bid up housing prices which led to the entry of ever-more buyers. It is during this period these institutions claim a dwelling shortage is the cause of record high housing prices. The failure of the RBA and government to identify the oversupply of mortgage debt in the household sector as the real culprit has now left the housing market and economy exposed to financial instability and a severe downturn,”
    Better late than never

  3. Perth and Darwin are palpably oversupplied. Adelaide is comfortably balanced, with very low growth in rents despite low vacancy rates. Brisbane is fine. Only Sydney can reasonably be said to be undersupplied, and that is primarily due to record high immigration. It must be recognized though that this large intake of migrants can only be sustained as long as the property sector is white hot, since that is the only growth sector in Sydney, and the most important source of new jobs. As the boom slows, either because of some exogenous shock or because yields become untenable and the financial exposure required of marginal buyers becomes too burdensome, Sydney’s ability to absorb extremely high levels of immigration without pushing up unemployment rates will erode. When unemployment starts to creep up, immigration will slow, further sapping the property market, reducing demand for labour, and so.

    But hey, you’ve heard it all before. Might as well party like it’s 2015!

    • Immigration already has slowed, from around 290k NOM down to about 200k, with further softening likely absent Australia finding a replacement for the mining boom.

      Also, births have fallen, in line with confidence.

      • Maybe it hasn’t fallen enough, yet, or maybe it’s a lagged effect.

        Who knows/cares?

      • Nationally house prices have increased at over 3x the rate of inflation
        Keep the nonsense coming cobber

      • Terror Australis

        Perth population levels are declining for the first time ever in the city’s peacetime history.
        A lot of these cashed up mining bogans would no doubt be heading east back to Sydney/Melbourne/Brisbane.
        So even if the national NOM suggests falling immigration, it doesn’t account for internal migration patterns still stoking the east coast housing markets.

      • I was talking about migration slowing, not house prices. You’re faculties are clouded. Again, breathe.

      • Annoying Devil

        Slowing immigration has weighed in on rental prices in parts of sydney and you can correlate the decline in NOM with rental vacancy rate rises in suburbs favoured by immigrants. In my experience, most newly arrived immigrants with the expection of a few chinese are renters. They are the main driver keeping rental market going for hovels that pass as shelter for humans in sydney. Sydney buyers are mostly speculators, either foreigners, boomers, or cashed up couples in good jobs, in that order. All are inter-dependant of each other in propping up the bubble. An exit from either demographic and prices at the very least stagnate. And prices can stagnate for a period as they did in Ireland. But for most speculators, a standstill in prices is as good as a crash, and time to exit, only they won’t be alone.

      • Not seen it – thanks Willy.

        Some interesting and enjoyable bits there, Country of origin with median age from that country is interesting – over about the next 15 years the number of Italians and Greeks living here is going to fall in absolute terms massively unless there’s a high degree of renewal.

        Also enjoyed trends in 457 visa grants. They’re going to want to try harder if they want to keep this bubble inflated.

    • “Only Sydney can reasonably be said to be undersupplied,”
      Nonsense
      Brisbane “is fine” VR 2.4%
      Mel VR 2.3%
      Canberra VR 1.9%
      “Comfortable” Adelaide VR 1.9%
      Hobart VR 1.5%
      “Palpably oversupplied” at 3.4% = more nonsense

      • Take a deep breath, cobber. Vacancy rates are not the singular indicator of a property market demand-supply balance.

        Real rents are flat in Brisbane and Adelaide. Do you know what that means? It means in real terms the cost of rental accommodation is not rising. So if you’re wages are rising with inflation, there has been no change in your capacity to house yourself. Which is to say, the situation is fine in those cities.

        Real rents are falling in Canberra, and are down sharply over the last few years.

        Rents and literally crashing in Perth and Darwin. Both remain elevated, especially Darwin, and this is undoubtedly a consequence of stupid planning policies, but both will see steep falls in asking rents in the coming years.

        The issue with looking purely at the vacancy rate is it ignores the proportion of the population that is actually looking for a place to rent. This is why a city like Adelaide, with its languishing economy and elevated unemployment rate, can register a low vacancy rate and low nominal growth in rents simultaneously. I’m sure you’ve been raised on the magical ‘3%’ figure but it pays to think more deeply at times.

      • Terror Australis

        Spoke to a friend in Canberra recently.
        She says public sector cutbacks over the last 5 years have really hit the city.
        I’d suggest that is the reason Canberra is in the basket case category along with Perth / Darwin.
        Not likely to change any time soon.

      • drsmithyMEMBER

        Real rents are flat in Brisbane and Adelaide. Do you know what that means? It means in real terms the cost of rental accommodation is not rising. So if you’re wages are rising with inflation, there has been no change in your capacity to house yourself. Which is to say, the situation is fine in those cities.

        There are two assumptions in this paragraph that need a little, as skippy would say, “unpacking”.

      • More nonsense
        Get with the program cobber.
        Rents are a function of wages not the other way round.
        Rents disconnected from prices years ago.
        Price is a function of supply and demand.
        Adelaide has some of the most under supplied and overpriced residential land per sqm in the country.
        This post is about a price bubble.
        I’m not sure how you’ve been raised but it pays to think before you engage at times.

      • Bullshit, my friend. Adelaide $ per square metre is roughly the same as Brisbane, slightly higher than Melbourne, and substantially lower than Sydney or Perth.

      • The Patrician

        Bullshit yourself, my friend.
        Adelaide – $517 per sqm
        Brisbane – $416 per sqm
        Melbourne – $459 per sqm

      • Fair enough, your’s is the superior data source.

        Though in the interest of interrogating your claim that “Adelaide has some of the most under supplied and overpriced residential land per sqm in the country”, care to include the other two major capital cities?

        I don’t deny that Australia has a long-term issue with land supply constraints, nor that land is needless expensive here. I never have. But right now the only cities that are clearly in the grip of a shortage in available accommodation are Sydney and, to a lesser degree, Melbourne. That is not to say that existing constraints haven’t elevated prices in other jurisdictions in the past.

        So yes, I support liberalising land supply, though I would abolish negative gearing and reform CGT as greater priorities, since I consider there to be defensible reasons for some constraints on urban sprawl, all of which I’m sure you would spit on.

      • The Patrician

        I agree there are defensible reasons for some constraints on urban sprawl….what is odd is that you are so sure of things you know nothing about

      • This the comments section of an econ blog, why would you find that odd?

        eg,
        Sydney – $681
        Perth – $674

  4. Wrt unemployment:

    Feb 1990 UE rate was equal to today at 6.1%
    Dec 1990 UE rate was 8.1%
    Dec 1991 UE rate was 10.7%

  5. the only way to constructively address this and force change is to challenge the ratings of the banks. Prove publicy why the banks are not AA- rated, and why they are sitting on a housing time bomb. Force the rating agencies (Moodys/Fitch/S&P) to re-evaluate their ratings based on the extreme risk of the housing market. If the banks get downgraded, and international investors become concerned about their solvency, their lending practices will tighten and begin the unwinding of the market.

  6. reusachtigeMEMBER

    LOLOLOLOL!!! Been hearing bubble popping talk for, like, ever! It’s hilarious and it’s old. Move on peeps and get some IPs. You will be way happier than living in this bubble popping fantasy of yours, one that only the doom creators want for you (and will never get because they are just jealous losers of society that is all)

  7. I have said it before: H&H often sums up his postings with a masterly last para or sentence:

    “…Which leads back to where we started, with a huge bubble sailing into a perfect economic storm as monetary and fiscal policy runs out of bullets approaching the end of the business cycle.”

    But there are theories that would place the “end of the business cycle” as late as 2023/2024

    I would very much prefer to see it end sooner, but the length has been a predictable 15/16 years and the end of the last cycle was circa 2008. However, larger economies with a different cycle timing, can pull connected economies into a new pattern; and there would be such a thing as external shocks of any kind. There was a time when I thought a proper crash had to come based on fundamentals, sooner rather than later because we never had a proper one in 2008. But I accept that it is extraordinary how the timing seems to run irrespective of fundamentals, especially house price median multiples. The highest any median multiple went in Ireland pre their crash, was 6.0 in Dublin – and most of the cities crashed from a peak between 4 and 5.

    So you might put it off till as late as 2023 with every dirty trick in the book, but with median multiples between 6 and 10, “bloodbath” is the rational prediction.

  8. If maximum LVR on investment purchases was set at 50% would there be an oversupply or undersupply?

    Australian residential property market is only undersupplied on the assumption demand from investors can be maintained at current extreme levels.

    Once the equity maaaate isn’t there to leverage off for the ‘next IP’ the demand is gone. It isn’t like these punters are actually saving cash for the deposits.

    • What if strict adherence to money laundering rules quickly made it so that using Australian RE to launder proceeds of time next to impossible? How would that effect the gap between supply and demand?

      • Sure – if Australia made it as hard to buy a $2m property as it is to open a $500 TAB account – demand would subside in that end of the market also.

        I don’t know the stats, but I assume the bulk of ‘investors’ are funding the apartment gluts in Melbourne and Brisbane in particular.

      • That would have to have an effect, surely. It also depends on how many illegal purchasers the ATO catch, and if they have to sell or have their properties confiscated. So far, they’re investigating 195 illegal purchases but have admitted it is just the tip of the iceberg, and of course, we don’t know the size of the iceberg. Also, so far, we’ve heard of one illegal purchaser buying ten properties in the media. How many others are there like this one?

        Of course there is always the possibility that the government could relax the laws so that lawbreakers are no longer breaking any laws. Or, amidst talk of an oversupply, they could just increase the immigration rate even more to soak up the supply of dogboxes. I wouldn’t put it past either side of govt to do these things. I doubt there is an oversupply of houses, except perhaps in new, outer suburbs where there is no infrastructure.

      • As hard as it is to open a TAB account could crash the market?

        Imagine if they made it as hard to buy a $2 million house as it is to volunteer to coach kids’ sports e.g. forced a police check, in every country you’ve lived in for at least the last five years and blocked you if you had previous convictions in offences related to financial fraud.

      • “Sure – if Australia made it as hard to buy a $2m property as it is to open a $500 TAB account…”

        Or to activate a mobile phone SIM card.

  9. harry petropoulosMEMBER

    Personally i have believed that house prices have been grossly overvalued for many years.It is ludicrous to believe that a correction will not eventuate.It is quite healthy for a 10%-15% correction as part of the cycle.However if a GFC 2 is upon us then Aussie house prices can fall up to 30%………..Aussie banks and our entire financial system would need a bail-out,very similar to America and Europe.I expect the RBA to proceed with it’s own Q.E…….we have seen this played out before and we will follow …..

    • Even without a GFC II reasonable to expect at least a temporary overshoot in the event of correction.

    • “It is quite healthy for a 10%-15% correction as part of the cycle.”

      It would be much healthier if it was a much larger correction. In many cases, if prices halved, they would still be overpriced. Also, a 10-15% correction would bring us back to the previous year, or even a few months prior, when there was still a big bubble.

      A 10-15% correction is still better than no correction, though.

  10. “a large number of Australians being forced to sell their homes”

    how about large number of negatively geared BBs who are about to retire? Just for a moment imagine a situation where prices stop growing and everybody finally accepts the fact that that no future capital gains are likely. What would BBs with no income to support NG, sitting on large capital gains do? Discount 5-10% to sell and lock gains, of course.

    Now imagine a situation where house prices fell 5-10 and are likely to fall further. What would BBs with no income to support NG, sitting on large capital gains do? Discount 5-10% more to sell and lock gains before CG disappears.

    and so on …

    This brings us to the main point: in a place where millions of middle class people who struggle with month to month payments speculate on house prices while constantly losing money, house prices are only and only supported by buyers. Once buyers decide not to pay more, the whole thing will collapse in a short few months.

    In a country where properties are owned by residents or by long term positively geared investors small price falls do not create chain reaction, but Australia is as far from such place as possible.

    Australian house prices will fall 60% and at that point nobody will be willing to buy!

    • Correct and it isn’t just the investors not getting capital gains anymore that are likely to sell.

      There is a massive cohort of ‘dreamers’ on big incomes that strap on $3m interest only mortgages to live the dream in good suburbs – hoping that the market keeps flying to give them the equity maaaaate to drawdown into a new Range Rover every 2 years and to send the tinlids to a $30,000 a year high school.

      Once the market turns and/or these people lose their jobs whole streets of ‘Blue Ribbon’ suburbs are ‘quietly’ put on the market. See 2008 as an example of this and that episode was over in 18 months – contemplate that environment stretching for 5 years plus as it has in many parts of the world.

      • Do people really do that? Quickly make up a catchy name for that cohort and draft up an article (obviously a positive one) and send it to Gotti and Salty, so they can be ahead of the new trends.

      • You don’t expect senior lawyers and bankers to live in ‘modest’ accommodation do you?

        Once the mortgage and car lease nut gets made – the money to send the kids to school is thin on the ground – unless Grandparents are paying – equity maaaate is the easy solution.

        I’ve met people with well in excess of $2m owed to the bank who couldn’t put $100 together at short notice. The veneer of wealth in Australia is very thin.

      • Annoying Devil

        Yes. I know the same people. A couple, close friends of mine, he an RE agent, she a Mortgage broker, very wealthy by all external appearances; nice house in a leafy suburb, an audi parked in the drive, kids pampered with latest ipads, but occassionally need a lend until commission comes through, knowing they can rely on a saver like me, who lives modestly. A housing crash would see them not only unemployed but completely bankrupt and stacking shelves at woollies. That’s if they are lucky to get that, as that will be a sought after job post crash.

      • According to mortgage underwriter friend at a big bank this is exactly the stress territory, even senior managers in the same bank are vulnerable, one was apparently refused but higher up over ruled and granted the loan.

        These are the $200K p.a. salary types in their 30s or 40s, who have not saved any substantial deposit, taken on massive mortgages (often with working partner) to buy the $2million+ property keeping up with the Jones’.

        However, it’s exactly these levels of management which are under threat due to digital disruption, cost savings etc., and as opposed to leveraged owners/investors with median or lower priced properties, these guys can really get into a lot of trouble with e.g. -5% change in value in the up market sector…. especially when there are fewer $200K administrative and other management jobs available…… and school bursars come chasing up fees…..

      • Pointe Gourde Principle

        Correct. This absolutely happened in the Boroondara local government area in 2008 (prices fell). But one of the issues at the time was margin calls on shares – not sure if this would happen now. People took leave or reduced their working hours so the effect wasn’t that dramatic but it was there. Saw a lot of people taking a haircut on property purchased in the run-up to the GFC. Didn’t recover until 2010-11. Prices in those suburbs have gone way past those pre-GFC levels now of course.

    • This is wishful thinking that usually populates the MB comments section

      Prices will vary in proportion to rents and (inverse) interest rates

      Since interest rates are only going down, to see a 60% drop in house prices we’d have to see a drop in rents even greater than 60%

      Otherwise housing would be yielding 6+% in a near zero interest rate environment

      Do you think this is credible?

      • SweeperMEMBER

        More credible than the current valuations.
        For example:
        Swiss gross rental yield = 3.81%
        http://www.globalpropertyguide.com/Europe/Switzerland/rent-yields
        Swiss 10yr note = .19% (was negative in April)
        http://www.bloomberg.com/quote/GSWISS10:IND

        Australian 10yr Bond = 2.95%
        Glen Waverely Yield = 2.4%

        I know you don’t like Glen Waverley (I think it is striking). But the reality is yields are low right throughout the city. Eg. Preston (not exactly Zurich) is yielding 3.1%.
        So a would be Swiss landlord can either:
        – earn .19% on a Swiss bond
        – earn 3.1% in Preston, Melbourne, Australia
        – earn 3.81% on a Swiss rental
        …….

      • Look at the USA ex NY/SF

        Once the banks stop lending – it doesn’t matter if rates are 0% and rental yield 10% – there are only so many ‘cash buyers’ that can avail themselves of more property.

        Further, yield doesn’t matter when fear abounds and assets are dropping fast. Just as markets overshoot higher they overshoot lower. Property takes longer because it is illiquid and costly to trade.

        Australia’s economy is totally dependent on the bubble for jobs and wealth. The whole thing will turn into a feedback loop.

      • Re: coming & 60% drop in rents – would put rent close to 2004 rates – live in hope. The cost of living in Sydney or anywhere else in Oz is absurd only most people embarrassed or ashamed to admit it. We’re all supposed to be living big lives on equity etc. the real estate emperor is naked – can’t wait to see him hosed down – tarred & feathered even! Free entertainment

      • I don’t know Swiss housing market nor the local regulations and tax laws so I don’t want to comment
        But unless you are positing that Australia has been in a bubble for 20+ years, the relationship has been reasonably steady (in fact, this isnt even the lowest the gap between housing and bond yields has been)
        Glen Waverley is again not representative of the entire Australia market, let alone Melbourne, let alone Sydney

        In any case what do you think would be a reasonable yield on housing given the current interest rate and economic environment? 4%? That would be a substantial premium on bond yields, more than the historical average. Would only take a 17% fall in prices to get there.
        And that is without taking into account likely falling bond yields.

        888888: global central bank coordinated effort will see to it that we never have a lack of credit anywhere in the world, there is no risk that banks will stop lending.
        No point looking at US ex SF/NY: those are the supply constrained markets like Melbourne and Sydney

        billygoat: unfortuntaley, deflation (except currency-adjusted) will never be allowed to happen

      • StomperMEMBER

        With falling national incomes, rising unemployment and high imigration putting pressure on wages – expect incomes to fall.

      • Thats entirely possible, a very reasonable prediction. But if it happens interest rates will be down
        Also, the AUD will be way down, encouraging Chinese criminals

        Falling wages will have a direct impact on rents. But again, how low do you expect wages to drop? 10%? 20% what be cataclysmic, but still wouldn’t see rents down 60%

        I just don’t think its feasible

      • “No point looking at US ex SF/NY: those are the supply constrained markets like Melbourne and Sydney”

        Melbourne is not supply constrained. Next time you fly in – look down at all the hobby farms growing rusting XD Falcons below. Next time you are 40 floors up – check out the immense amount of land available around the area next to the CBD where I guess ‘industry’ previously occurred.

        Regardless of your ‘belief’ in the abilities of Central Bankers to maintain the debt flow – US mortgages became very hard to come by post crisis.

        Even Bernanke said he couldn’t get one.

      • Empty or mis-used land is not supply.
        If there is so much supply, why are rents so high?

        US mortgages became hard to come by, Then what happened?

        Did the economy suddenly flourish again, causing credit to become available?

        No.

        The central banks acted, and all of a sudden money was flowing like water.

        The economy and money supply is not a natural system with entropy and balance. it is purely man-made
        It just requires the will to do so.

        The only “danger” is that the central banks lose their nerve, or some political impediment develops

      • @Coming

        Your theory that low rates and stable rents will keep prices up because rental return is high compared to other investment options might be true in a country where cash investors invest in properties. In Australia, for most of investors buying a property makes a return of negative few percent (millions of NG investors). So without capital gains, stable rents and low rates make no good to them, they are losing money on their investments.

        House prices in Australia cannot stay stable because that doesn’t work for millions of investors. Australian housing has extremely strong positive feedback that either drives up or down.

        3.5% rental return could keep prices stable if there is similar number of cashed up investors ready to buy and NG investors who are going to sell when capital gains halt. Unfortunately for them, number of NG investors is hundreds of times larger than cash buyers, so going up or down is the only way. Since prices went up for so long it will not take long before prices turn down and with the help of the same positive feedback go down to level where even 80% LVR investors can make 3% return. For that to happen net pre-tax net rental yield has to be at least 8% (0.8 x whatever the mortgage rate + 3%). So if we assume mortgage rates go down to 4%, net rental yield has to go to 6.2%, gross yield over 6.5% for houses and 7% for units. For this to happen prices have to go down by over 50% or rents have to double. With recession looming rents have low chance of going up so prices lower by more than 50% is the only house price support.

      • drsmithyMEMBER

        But unless you are positing that Australia has been in a bubble for 20+ years, […]

        There is a steady flow of data on MB suggesting property prices in Australia have been unaffordably high for at *least* 20 years, at least in capital cities – just look at the median multiple numbers that are regularly published. From memory, most capitals haven’t seen a MM around 3 since the early ’80s, if not ’70s.

        Twenty years ago is only 1995. Wasn’t that around the end of the recession we had to have ?

      • drsmithyMEMBER

        Melbourne is not supply constrained. Next time you fly in – look down at all the hobby farms growing rusting XD Falcons below. Next time you are 40 floors up – check out the immense amount of land available around the area next to the CBD where I guess ‘industry’ previously occurred.

        Empty land isn’t much good if you can’t do anything with it.

        Just like zillions of empty apartments aren’t much good if they’re not available to rent, or not suitable for purpose.

  11. Hans Kunnen ignores that many of the forced sales will be by negatively-geared Investors.
    This cohort is already “losing” money. Real money, every month that could be going toward saving or consumption is instead going toward mortgage interest (and may principle).
    A dispassionate consideration of a falling market may urge them to dispose of their properties, singularly or en-masse.
    Of course tenants may also consider their options and vacate leaving investors with houses which might not be readily filled.
    Investors may also rationally desire to sell a vacated property rather than re-let it and risk being locked to that lease for 12 months. This puts them in a trap where there is no rental income and the prospect of falling values.
    All in all it is predictable that Owner-Occupiers will hang on and pay the mortgage but one cannot discount the liklihood that investors are less inclined to do so.

    We shall wait and see.

    • Fortunately I think there are only a couple of investors out there, and most people are pretty oblivious to the supposed “value” of their house and never pay any attention to it.

  12. arescarti42MEMBER

    “He said it would take a serious recession for the pair’s scenario to come into play. “I mean unemployment rates going up to 8 per cent so people are forced sellers,” Mr Kunnen said.”

    It really strikes me as amazing that people seem to think the notion of 8% unemployment is completely ridiculous. Unemployment went from 4% to 6% very rapidly post GFC, despite massive Government stimulus and huge rate cuts. We’re already at 6%+, another external shock could very easily push us above 8%, especially given the increased difficulty in mounting a fiscal or monetary response.

    Surely if all you think it’d take for a bloodbath scenario in property is unemployment at 8%, then surely that’s not a particularly far fetched outcome.

    • The UE rate is now determined moreso by the participation rate and it is very unlikely without a major crash the UE rate will rise to 8%.

  13. The strategy of the uber bulls seems to be picking a few past prediction by a few people and saying, “See, everybody was wrong”…dear me…

  14. Alexandra Chapman

    As property prices are set at the margin by the most recent sale, it just needs for people to stop buying for prices to fall. And that just needs a shortage of credit to limit the buyers .

    That credit shortage may be imposed on our banks (who borrow short to lend long on property) by the overseas bond markets. That can happen if overseas funders come to believe that the Aussie banks are overexposed to property.

    This is the same scenario that caused the withdrawal of credit to local banks which resulted in 1891 crash. (Plus ca change?) And the subsequent recovery in prices from that crash took nearly 70 years!

    • That is a possibility, however, my worry is that foreign buyers wanting to park their money in Aussie real estate will continue to buy, and price is no concern to them. It’s not as though any extra fees or charges are going to be a deterrent.