Last week BIS Shrapnell forecast that house prices in Sydney will rise as much as 20 percent in Sydney over the next few years, with significant growth in most other major centres too.
Harry Dent, from HS Dent Investment Management in Florida, doesn’t agree. “Bubbles always burst,” he says in this edition of BTalk.
Harry’s argument is that as a population ages you have a lot of empty-nesters wanting to cash in on their homes and downsize. Without enough young people to create the demand prices will fall. In Australia, the bubble has been perpetuated by high immigration, although most migrants will buy smaller, lower-priced homes, meaning supply outstrips demand at the top of the market.
Studying the demographics of a country will surely produce a more accurate prediction rather than just looking at past cycles.
If he’s right, think hard before you argue too hard for reductions in migration levels. It could really hit your back pocket!
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Trump, Boris and Juncker
I came on to TalkRADIO to talk about a potential US UK trade deal and ended up talking about why Brexit happened in the first place.
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Rebuilding Economic Theory The Old Way
Attempts by the Oxford Reviewof Economic Policy to rebuild macroeconomic theory dolittle other than tweak the edges of conventional thinking.
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A choppy New Year
It was far from a quiet Christmas period, with market volatility driven by data, trade concerns, a government shutdown and a very different attitude coming from the US Fed.
