Is the housing bubble about to pop?

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Specufestor spirits are certainly under assault, as the AFR noted over the weekend:

Property investors could be forgiven for thinking this week that the universe, particularly the financial universe, is out to get them. And they would be right. Runaway property prices in Melbourne and Sydney and a spike in lending to investors have regulators concerned about financial stability, the level of household debt and the impact of a market collapse on savers, many of whom seem to think that house and apartment prices only go in one direction. Banks, meanwhile, are scrambling to abide by lending restrictions imposed on them by the Australian Prudential Regulation Authority.

…”I think people should be leaning towards other asset classes. History tells us those sorts of runs [in house prices] don’t go on forever,” adds AMP Capital head of investment strategy Shane Oliver.

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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.