Home > Predictions > The Australian housing bubble will burst

The Australian housing bubble will burst

An impartial observer, MISH, confirms the reality that insane lending standards have fuelled an insane bubble that will result in a massive bursting.

It hath been foretold.

People find it difficult to save for a down payment for the specific reason Australia is in a bubble. And just as the US bubble burst so will Australia’s. It is really sad to see Australia lenders fuel the bubble this way.

One thing different in Australia regards the ability to “walk away”. Clearly the lenders are playing off that, with no regards to ethical conduct. It won’t matter.

Bubbles always pop no matter what the conditions or restraints are.

For example, the Bankruptcy Reform Act of 2005 was supposed to halt bankruptcies in the US. After the bill passed, lenders, especially credit card and Home Equity lenders, took advantage of the situation counting on home prices to rise and the inability of consumers to declare bankruptcy. The mess blow up in the lenders’ faces anyway.

The same scenario is destined for Australia. Moreover, the bigger the bubble the bigger the bust. Australia’s bust will be staggering.

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