We’ve seen this before from Harry Dent – back in 2012 Harry Dent was saying that the Australian real estate market is a bubble ready to burst. Now he’s back in Australia to speak at seminars and to promote his book, “The Demographic Cliff”. He says that house prices are unsustainable and will fall by at least 27 per cent in Sydney and Melbourne over the next several years. He has previously said that Brisbane is the most overvalued city in the world.
So what is Harry Dent saying now?
“I am saying that China has the biggest [bubble] and that is going to trigger [the bursting of] your bubble. Your real estate is so high it has to come down in the next few years.”
According to the Property Observer he said:
“I see it like a popcorn popper, different markets are bursting at different times … but all of real estate in coastal cities all around the world is greatly overvalued and they’re all going to burst whether it be 30% or 40% … or 90% in the worst case.”
Here’s Harry in a recent interview in Australia:
Harry Dent seems to be pretty confident in himself, but not everyone agrees with his assessment of the Australian property market. Here’s an article by Michael Yardney writing in Smart Company:
Are we in a bubble?
The simple answer is NO and property values are not about to collapse!
Sure house prices are high compared to many parts of the world, but rising prices per se don’t cause a bubble.
What is needed is for the rises to be fuelled by increased borrowings – leverage – which makes the banking system fragile and unstable.
Interestingly, Dent made similar predictions in 2011, 2012, and 2013 as did The Economist and Demographia.
On the other hand the RBA and chief economists at all of Australia’s major bank, who have proved more accurate at predicting the swings and roundabouts of the Australian economy, believe our property market is fairly valued and not in bubble territory.
What do you think of Harry Dent’s predictions for the Australian real estate market?
Are Australian property prices unsustainable? Or , as others suggest, our low interest rates, low unemployment, and an undersupply of properties should keep prices in check? I’d love to hear what you think, so please add your comments below, or share this post on Facebook.