As house prices fall, Steve Keen’s phoenix rises

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Via the AFR:

“The catch-22 for housing bubbles is that the flow of new mortgages is the main determinant of house prices, and for them to continue rising, the rate of growth of new mortgages has to keep rising,” academic economist Steve Keen said.

“We now seem to be approaching the limit that households can bear, so mortgage growth is slowing down and new mortgage growth is negative.”

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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.