And there’s the external shock to finish off housing

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There it goes. The Australian property bubble is bursting and it is not going to be pretty.

MB has previously posited an ultimate fall in house prices of 20-30% in nominal terms from respective city peaks over two price fall periods. That could translate to a 40% fall in real terms over the long term.

The first leg was supposed to be 10-15% in short order and the second over the longer term similar as China structurally slowed one way or another. As of yesterday the second leg has been brought forward.

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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.