More from Down Under: Australia is Experiencing First Stages of Housing Crash

From news.com.au

Residential property values are falling right across the country and those falls will pick up as the year goes on.
It is frustrating to see all the "For Sale" signs, hear anecdotes of friends and relatives having to slash prices to get a buyer but then read real estate agent or media reports cherry-picking the increasingly rare "good news" sales. It gives a very false perspective of reality.
Louis Christopher's independent property analysis group SQM Research has data on how much residential property values have fallen from their peaks across all capital cities so far this year and how much further those declines are set to go for the rest of this year.

The facts are there are 70 per cent more properties on the market today than this time last year and auction clearance rates have plunged.
A share market correction is a pullback of 10 per cent from peak levels. Anything over 20 per cent is a crash.
We're heading for a correction across the board and a crash in selected regions. How much pain will depend on several unknown factors.

But from the Economics Group "Australia has a poor housing supply not bubble " from September 2010.  Housing supply was tight in 2010.

"Moreover, if we were to (incorrectly) assume that there was a bubble in the Australian housing market, there is every possibility it would deflate in an orderly fashion. The usual reasons for any asset bubble popping are unemployment, recession or oversupply. In the Australian situation there is a (growing) undersupply of housing; economic growth is accelerating; and the labour market is performing strongly.

The fundamentals of a housing market eventually matter.  Housing supply and vacancies are tight until they are not and everything comes unglued.  Just ask any of these so called dozens of Housing Economists, Chief Economists, Financial Advisors, Professor's,  koolaid drinkers from the USA from 2004-2006.  Here is one infamous quote about housing supply in the US in 2005.

Neil Barsky, Alson Capital Partners, LLC:

"What Housing Bubble?," Wall Street Journal (July 28, 2005):

There is no housing bubble in this country. Our strong housing market is a function of myriad factors with real economic underpinnings: low interest rates, local job growth, the emotional attachment one has for one's home, one's view of one's future earning- power, and parental contributions, all have done their part to contribute to rising home prices. "What we do have is a serious housing shortage and housing affordability crisis."

How many vacant homes in the US now? Hmmm.  11% of all homes in the US are vacant. Almost 20 million, yup " a serious housing shortage".

More on the Australia housing bubble
Steven Keen on the Australia Housing Bubble
Why Australia is Set to Follow US Path of House Price Doom
5 myths that won't stop a housing crash
Steven Keen's blog ( a definite stop)
RBA warns many first home owners who used grants may now be vulnerable
Arrears on mortgage repayments spike to record highs 
Home loans drop to ten year low
Home prices down in most major centers



You can cross Australia off the list of Countries that escaped the global housing bust.