I’m sure many of you watched the 4 Corners housing bubble take last night, here. It was nothing terribly new but did a reasonable job of summing up the issues:
- record household debt;
- dodgy broker incentives;
- over-exposed banks;
- macro-economic risk, and
- over-extended supports such as monetary policy.
It was basically a decent cautionary tale.
What was disappointing about it was there was little granularity in how the bubble has transformed over the years. There was nothing about:
- foreign buyers;
- the role of high immigration;
- supply versus demand;
- fiscal policy supports and risks;
- economic transformation, and
- politics.
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Given the bubble is much more a political economy figment these days than it is anything economic, it kind of missed the point.
Still, if it serves to spook a few folks then all to the good.
