Australia Real Estate Forecast Confusion

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.

About Duncan Davidson 228 Articles

Affiliation: NetService Ventures

Duncan is an advisor to NetService Ventures, where he focuses on digital media and the mobile Internet.

Previously he was at four start-ups: Xumii, a mobile social service based on a Social Addressbook; SkyPilot Networks, the performance leader of wireless mesh systems for last-mile access, where he was the founding CEO; Covad Communications (Amex: DVW, $9B market cap at the peak), the leading independent DSL access provider, where he was the founding Chairman; InterTrust Technologies ($9B market cap at the peak), the pioneer in digital rights management technologies, now owned by Sony and Philips, where he was SVP Business Development and the pitchman for the IPO.

Before these ventures, Duncan was a partner at Cambridge Venture Partners, an early-stage venture firm, and managing partner of Gemini McKenna, a joint venture between Regis McKenna's marketing firm and Gemini Consulting, the global management consulting arm of Cap Gemini.

He serves on the board or is an adviser to Aggregate Knowledge (content discovery), Livescribe (digital pen), AllVoices (citizen journalism), Xumii (mobile social addressbook), Verismo (Internet settop box), and Widevine (DRM for IPTV).

Visit: Duncan Davidson's Blogs

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