Even the UBS guys acknowledge that, despite calling a top in Australian housing, Aussie house prices are unlikely to crash.
The total value of the Australian housing market is an insane $6.4 trillion. Compare that to the $1.56 trillion of outstanding mortgage debt.
When you look at housing from this perspective, you’ll see nearly all the government schemes designed to make housing more affordable will actually send house prices higher.
We have the RBA telling APRA the Aussie property issue is their problem. You’ve then got a federal government looking at harebrained schemes.
Because it makes for good click bait, there is generally a prediction about a house price crash making the headlines once a week in Australia, these days.
If you want to boil history down to a few words, it’s always been a battle for scarce resources. Land is the resource. In land there is power.
It will take interest rate hikes by the RBA to bring the Australian housing market down. And the RBA is simply not about to do that.
The biggest culprit here is the RBA. It singlehandedly reignited the Aussie property boom with two additional rate cuts last year,
The RBA, in an epic policy blunder, cut rates twice and reignited the housing boom. And APRA has been powerless to stop the surge in loan growth.
Australians have been lulled into thinking that the secret to wealth involves buying an expensive property, hoping it becomes even more expensive, and then selling it to someone else.