From bloomberg.com 13 Apr 2011 – “We have a very overvalued housing market and even a small adverse shock can be magnified by a large adverse impact on property values,” said Gerard Minack, Sydney-based global developed markets strategist at Morgan Stanley, who asserts Australian home prices are as much as 40 percent overvalued. “We’re seeing that now in parts of Queensland.”
Australia’s housing is the most overvalued in the world, the Economist newspaper said last month. The country had the most unaffordable homes among English-speaking nations, with the Gold Coast and Sunshine Coast markets near the top, according to a Jan. 24 report by Belleville, Illinois-based consulting company Demographia, which compared 325 housing markets in seven developed economies.”
Guess who was second to Sydney in the ‘Severely Unaffordable Housing Markets’ category of the Demographia study? Yeah, your home team, Vancouver.
Canada and Australia have been moving lock-step: Resource based economies, strong dollars, and housing bubbles with off-shore buyers. We expect Canada to follow Australia with respect to RE weakness. This could herald the beginning of our crash. -vreaa
The Aussie RE turn is also covered in recent posts at Mish’s ‘Global Economic Trend Analysis’, ‘Australian Home Sales Sink, Luxury Units Sell for Half Cost; New Home Loans at 10-Year Low; Australia Retailers in Deep Trouble; Party Officially Over’, 10 Apr 2011