Sure looks like it. Were we in a normal commodity cycle, Australia would be looking down the barrel of disaster. As house prices plunge, the global economy is fading too. A global recession is quite possible and, more to the point, the weakness has been driven by a slowing China.
Chinese property construction is weakening and it is the most important guide to bulk commodity prices in the known universe. Were it a normal commodity cycle, iron ore and coking coal would right about now by falling fast, well below the Budget outlook.
If we were entering a terms of trade shock along with the domestic demand shock from crashing house prices then all bets would be off for a deep recession and historic house price crash.
