Greg Canavan is a charlatan.
At least according to property market commentator Terry Ryder in an article published this month in Property Observer.
Ryder says anyone who claims to be able to predict what the nation’s property market will look like in 2013 is a ‘charlatan’.
He went on to say there is no such thing as ‘the Australian property market‘. And that you should instead view Aussie property as a collection of separate geographical trends.
Ryder sees Perth and Darwin continuing their upward trends in 2013. Sydney and Brisbane will experience a ‘solid increase’. Adelaide will see moderate improvement
Greg makes a compelling case here for property prices starting to go down, pretty much everywhere. He’s spent the best part of the year on a report that traces the fuse of the global financial crisis to its final destination…right here in Australia. To the housing market…and then the banks.
The conventional view is that we managed to avoid the carnage playing out in the rest of the world because of better economic management, better regulation in the banking sector, and, of course, the China boom.
As Greg shows graphically here, that view is very, very wrong.
The video shows we are ALREADY in recession territory. Which explains why many people ‘feel’ like we’re in a recession even though the headline numbers look good.
And it shows what is likely to happen next.
If you haven’t watched it yet, you should look at the evidence and decide for yourself if Greg is being a ‘charlatan’ in predicting the end of the Aussie property boom. Or just a realist.
But is a nationwide property crash REALLY a possibility in 2013?
As Dan Denning wrote earlier in the year:
‘Guy Debelle of the Reserve Bank of Australia assures us that improbable events will probably not happen. Specifically, Debelle says the chance of a housing crash in Australia is, ‘not something that keeps me awake at night.’ We’ll have whatever bottle of wine he’s drinking with dinner!
‘Seriously though, why do we insist on bringing up the obvious fact of how ridiculously overpriced Australia housing is? Is it because we want people to buy shares instead of homes, so they’ll need our share-tipping newsletters? Is it because we rent rather than own and are profoundly bitter and jealous? Or is it because your editor is a self-centered American projecting our American experience on an Australian housing market that we don’t really understand?
‘It’s none of those things. We write about an Australian housing crash because it’s a threat to your financial wealth. That’s it. It’s one of those improbable financial events that have an oversized impact on your life if and when they happen. That alone makes it worth analysing and offering a contrary view on.
‘Besides, credit booms are always obvious to central bankers in hindsight. You can count on many in-depth stories into how it all happened by the same newspapers that derive revenue from the real estate, mortgage lending, and construction industries today. A little advance warning when you’re in the middle of a credit bubble can prevent you from making a mistake it takes you years to recover from, if you recover at all.
‘And for what it’s worth, the standard arguments made by the people whose professions depend on rising house prices – no oversupply, higher lending standards, low unemployment – aren’t arguments for why housing can’t crash here. They’re only arguments (some of them not even valid) for why it hasn’t crashed yet. No sensible person would dispute that paying half a million dollars for a house is crazy. At a national level, it’s an enormous misallocation of capital and savings. But that’s a story for another day.’
Now it’s a story for another year!
Daily Reckoning Australia