Lets Talk About The Australian Housing Bubble
b'ARVE Error: Mode: lazyload not available (ARVE Pro not active?), switching to normal mode\\n\\n\\n\\n\\n\\n\\n\\n\\n{"@context":"http:\\\\/\\\\/schema.org\\\\/","@id":"https:\\\\/\\\\/onproperty.com.au\\\\/lets-talk-australian-housing-bubble\\\\/#arve-youtube-pzy7sqyytb0659a0b2e7030f759600183","type":"VideoObject","embedURL":"https:\\\\/\\\\/www.youtube-nocookie.com\\\\/embed\\\\/pZy7sQYyTb0?feature=oembed&iv_load_policy=3&modestbranding=1&rel=0&autohide=1&playsinline=0&autoplay=0"}\\n\\n\\n\\nAfter 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?\\n\\nToday, 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.\\n\\nThis 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.\\n\\n\\u201cThere\'s a hedge-fund manager and an economist who pose as a gay couple on a combined income of $125,000 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.\\u201d\\n\\nThis 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.\\n\\nThis 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.\\n\\nWhat else was there? They talked about the residential mortgages as a percentage of total loans and they show Australia where residential mortgages as a percentage of total loans is over 60%. Norway is 40%. Hong Kong is like 15%. The U.S. is like 33%-ish. So, Australia is well above the pack in terms of we got more of our home loans as a percentage of our loans than, basically, any other country out there by the looks of it in this graph.\\n\\nI\'m not sure if it\'s misleading in they\'re leaving out other countries that have similar to us. But they\'re also talking about an oversupply of apartments and housing. Talking about that Australian housing apartments are selling for $11,000 a square meter, which is similar to Hong Kong; which is a really expensive area. Manhattan averages around $14,000 a square meter, so they\'re saying that obviously, very expensive here.\\n\\nTepper is warning bluntly that Australia has one of the biggest housing bubbles in history. Noting that the country\'s real estate value to GDP is 3.8 times compared to that with Ireland and Japan, which both were at multiples of 3.5 times before they experienced a housing market crash.\\n\\nWe\'re above the 3.5, which other countries had high real estate value to GDP and then they went and had a crash. Japan\'s real estate fell by 80% and Ireland\'s fell by 50%.\\n\\nHe is predicting falls in the Australian housing market of up to 50% in Sydney and Melbourne and around 80% in mining towns.\\n\\nIt\'s also showing it has the highest level of household debt to GDP in the entire world. There\'s a lot of things that are kind of point toward the Australian market potentially being over-inflated.'