Invest
Property crash predictions ‘wide of the mark’
One of Australia’s leading economists has responded to dire predictions for Australia’s property market and recent reports claiming that Australian banks fail to check proof of income when processing loan applications.

Property crash predictions ‘wide of the mark’
One of Australia’s leading economists has responded to dire predictions for Australia’s property market and recent reports claiming that Australian banks fail to check proof of income when processing loan applications.

In a research note published on Saturday, AMP Capital chief economist Shane Oliver responded to last week’s Big Short reports – saying foreign hedge funds and various commentators have been predicting a property crash for more than a decade that have been “wide of the mark”.
“Australian home prices are likely to see yet another five to 10 per cent cyclical fall at some point in the next few years and, yes, home prices are overvalued, posing a downside risk, but a 50 per cent crash is unlikely,” Mr Oliver said.
“The latest crash call aired on 60 Minutes has raised nothing that wasn’t already well known,” he said.
“Australian property is no more overvalued than it was a decade or so ago. The ratio of household debt to income is about the same as it was prior to the GFC, but interest costs have collapsed and there are no signs that Australians are having trouble servicing their debts.”
Mr Oliver admits there has been “some easing in lending standards”, but he does not accept that Australian banks are not regularly checking for proof of income when processing loan applications, “particularly with APRA breathing down their necks on ‘bubble’ worries”.
“More fundamentally, Australia has not seen the growth in low-doc and sub-prime loans that don’t even require people to lie about their lack of income, which were central to the US housing crisis that triggered the GFC,” he said.
“To get a crash we will either need a massive rise in interest rates, which is unlikely because the RBA is not stupid, or a deep recession in the economy, which seems unlikely," he added.
“Seems to me that some people have just seen The Big Short and want to be film stars – or least are desperate to find the next big short. The trouble is that shorting Australian banks is becoming a rather crowded trade.”

Property
House prices tipped to surge 30% on the back of cheap money
According to new documents released from the Reserve Bank of Australia, persistently low interest rates could push up property prices by as much as 30 per cent. ...Read more

Property
Double-digit price growth to stick around as ‘property boom’ arrives
According to leading indicators, Australia’s property boom officially began in November, following several slow months on the back of the COVID crisis, with double-digit price growth already logged ...Read more

Property
How to turn your ‘costly’ lifestyle investment into a money-making asset
Emotionally driven holiday home buyers are being advised to seek maximum rental income and depreciation benefits to make their investments viable. ...Read more

Property
Dutch e-commerce giant VidaXL ramping up Australian operations
Netherlands-based online retailer VidaXL is ramping up its operations in Australia, by launching the build of a brand new 81,000 sq m national distribution centre in Melbourne. ...Read more

Property
Invest in property or watch savings dwindle, expert warns
Money is cheaper than it’s ever been on the back of a favourable interest rate environment, compelling Aussies to shift away from other types of investment vehicles and into property investment. ...Read more

Property
Is 2021 a great year to buy property? Aussies think so
2021 is tipped to be one of the busiest years for property ever as money remains cheap and readily accessible, with a majority of Aussies agreeing that now is a good time to buy. ...Read more

Property
Young Aussies set their sights on home ownership in 2021
The COVID-19 pandemic has accelerated younger Australians’ desire to own their own home, despite affordability remaining a significant concern, new research has revealed. ...Read more

Property
HomeBuilder stimulus causing surge in new houses: ABS
Housing schemes such as HomeBuilder and historically low-interest rates are causing a surge in new properties being built in Australia, official stats have shown. ...Read more

Property
House prices tipped to surge 30% on the back of cheap money
According to new documents released from the Reserve Bank of Australia, persistently low interest rates could push up property prices by as much as 30 per cent. ...Read more

Property
Double-digit price growth to stick around as ‘property boom’ arrives
According to leading indicators, Australia’s property boom officially began in November, following several slow months on the back of the COVID crisis, with double-digit price growth already logged ...Read more

Property
How to turn your ‘costly’ lifestyle investment into a money-making asset
Emotionally driven holiday home buyers are being advised to seek maximum rental income and depreciation benefits to make their investments viable. ...Read more

Property
Dutch e-commerce giant VidaXL ramping up Australian operations
Netherlands-based online retailer VidaXL is ramping up its operations in Australia, by launching the build of a brand new 81,000 sq m national distribution centre in Melbourne. ...Read more

Property
Invest in property or watch savings dwindle, expert warns
Money is cheaper than it’s ever been on the back of a favourable interest rate environment, compelling Aussies to shift away from other types of investment vehicles and into property investment. ...Read more

Property
Is 2021 a great year to buy property? Aussies think so
2021 is tipped to be one of the busiest years for property ever as money remains cheap and readily accessible, with a majority of Aussies agreeing that now is a good time to buy. ...Read more

Property
Young Aussies set their sights on home ownership in 2021
The COVID-19 pandemic has accelerated younger Australians’ desire to own their own home, despite affordability remaining a significant concern, new research has revealed. ...Read more

Property
HomeBuilder stimulus causing surge in new houses: ABS
Housing schemes such as HomeBuilder and historically low-interest rates are causing a surge in new properties being built in Australia, official stats have shown. ...Read more