ZH posted this report on Australian real estate, which picks up on a theme of mine, that the Lucky Country has taken on too much debt, and is about to have their housing bubble burst. The conventional wisdom in Oz is that the housing wonderland will continue to rise. My on-the-ground contacts forwarded to me a comment by the chief economist of business forecaster BIS Shrapnel, who just said that the cooling off of the rest of the world did Australia a big favor by crimping risks. He expects a 30% rise over the next three years. What is curious about his analysis is he also expects interest rates to rise 2% and sees mortgage rates above 9% – not exactly the climate for a robust housing market. Indeed, that is usually the formula for bursting a bubble.
My on-the-ground guy says he is simply confused over the conflicting analyses.