The RBA’s failure to lower interest rates this week has put the spotlight back on the topic of whether Australia has a housing bubble or not.
After Steve Keen lost his bet on house prices and made his long march to Mt Kosciuszko the house bubble protagonists seemed to go quiet but they are creeping back now – very notably with a recent book authored by David Lindsay ‘Australia – Boom to Bust’ and his associated blog
But for every confident sounding bubble protagonist like David Lindsay there are always plenty of equally confident bubble deniers like John Mulcahy, chairman of Mirvac Group who says “Australia has not seen a housing bubble, nor is it likely to”
The debate has been polarized for a long while but something I’ve noticed recently is a kind of halfway view that reluctantly admits that Sydney and perhaps Melbourne are heading into bubble territory but that the rest of Australia is not.
I think part of the problem is what actually makes a bubble. The noteworthy housing crashes in USA, Ireland and Spain are often cited as examples of where Australia is heading but there are differences in demographics, Government policies and banking regulations, which might not make this a sure thing.
Maybe instead of a housing bubble we just have a debt bubble. Or is one just the manifestation of the other?
So what do ASF members currently think about all this?
However, before diving too hard into the serious stuff here is some humor to help sharpen the senses: