Let’s Talk About The Australian Housing Bubble

After the recent Sydney/Melbourne boom and some concerning articles it’s time we talk about the Australian housing bubble. Is it real or an over-exaggeration?

Today, I want to talk about the potential housing bubble in Australia, read a couple of articles with you guys that are talking about this. And then, try to come to an understanding of whether or not there is a housing bubble and some of my thoughts on what I would do in this situation.

This came to my attention through an article on the financial review. It got highlighted to me by onthehouse.com.au. They sent me an email about this, but basically, it’s an article by Anne Hyland on afr.com, which is the Australian Financial Review. I’ll link up to it, just go to
onproperty.com.au/afrarticle. Yup, let’s do that link and you can check it out there.

“There’s a hedge-fund manager and an economist who pose as a gay couple on a combined income of 5,000 and they tour Sydney’s western suburbs viewing housing developments and meeting mortgage brokers for research to determine if there is a housing bubble in Australia and they came to the conclusion that this is worse than they thought.”

This was written back in February of 2016. They’re saying that the further west they went, the more irrational they felt. Lots of supply and prices that bore no resemblance to construction cost or the incomes of people around there. There was some interesting things in this article; like they discovered repeatedly that mortgage brokers are advising them to actually lie on the loan application documents about the deposit and about their income.

This is quite concerning as I read this and they asked if the bank would call our employers and both reputable and disreputable brokers said they rarely verify pay slips. That’s concerning to see, that the banks aren’t doing that.


http://onproperty.com.au/355 – View the full transcription and audio version of this episode.

http://onproperty.com.au/free – See real positive cash flow property listings