Lindsay David predicts real estate bubble will pop end of 2017

Will housing bubble pop in 2017?

That’s the warning from Lindsay David, founder of LF Economics, author of Australia: Boom to Bust, and resident doomsayer of the Australian economy​

“It’s going to be a disaster. By the end of 2017 the housing market will crash, and at least one of the big four banks will either be bailed out, go bust or be nationalised,” he said.​

Will housing bubble pop in 2017?

It will be interesting to see if the housing market crashes by the end of 2017. 6 weeks to go.

Tagging @Barny because we have been following this for a while.

Tic tock.

 

Simply not going to happen. We will be lucky to have an interest rate increase by February 2018.
We all know generalized articles aren’t worth the paper they are printed on.

There is no “Australian housing bubble”... only Sydney, Melbourne and Canberra to a lesser extent have recorded boom like gains over recent years. Same cannot be said for the rest of the country.

To have an Australia wide collapse something external would need to trigger... i.e. war or recession.

 

Yes it's a load of c$ap as these things often are. If the housing market crashed in this country it would be disastrous to say the least. No way it's going to happen. I have heard these statements for decades and i'm still making money in real estate all these years later. Don't believe everything you read. The other statements that make me laugh are on the news with statements like the Brisbane property market is falling but i can tell you now my properties in Brisbane are all going up at the moment. They are blanket statements and do not reflect the whole market. Brisbane has many area's that move in difference cycles.

 

I think really it's never a good idea to believe these predictions because it's not how bubbles work. Most bubbles take more than a year just to peak let alone crash, and if you look on a macro scale it's almost impossible to spot the start of a crash.

If you look at USA for example major cities peaked as early as 2005 and as late as 2007. If you looked at the whole market it would have been maybe mid 2007 before you could say for sure the bubble had burst, but many big cities were already falling long before that point. By 2008 most were down anywhere between 1% and 40% but even within cities there was a huge difference in how well some areas did. There was no "crash starts here" moment, or not one you could see without the benefit of years of hindsight.

Dublin was a good example of the suburb variation, because new (stalled) housing estates for example in many cases became simply worthless, while some good areas really just took a very temporary dip. The "50% drop" you hear about was certainly a huge one, but it was also misleading because if you owned in say Belmayne you might have lost pretty much everything, while if you owned in say Cowper or Sandymount you probably did ok. Location and asset quality was a huge factor, and the "50%" was a median. Many places barely missed a beat and recovered very fast.

What I'm saying is "the crash" in Australia might be underway, and we won't know till long after the fact. But that's just a distraction anyway. I think it's all down to individual portfolios and your own plan long term.

 

This. I am currently on the house hunt in Melbourne's west and it is very competitive. Most good houses are gone after 1-2 opens, and there are 20-30 people at some opens.
Unless there is an international calamity I cant see it crashing out this way

 

I miss the old thread.

Anyhow, interesting how Phillip soos (Lindsay's partner in researching) has changed his tone and now believes that Phillip Anderson's 18 year property cycle could be right. That cycle has about 5-9 years according to Anderson till it busts, I bet they bring another book out soon.

 

Totally agree with you. That's not to say you should throw good money after bad... still buy well and with good fundamentals in mind.

 

You can still post in the old thread if you want. I can't, so I started this one to remind you of "tick tock".

I wonder if LD will come back and withdraw his comment about me attacking his credibility. If he repeatedly claims the property market will crash by the end of 2017, and at least one of the big four banks will either be bailed out, go bust or be nationalised, and then that doesn't happen, does he have any credibility?

Maybe if he said it would and I said it wouldn't, and I am proven correct, then I am the guru? Maybe I should publish a book "Why the Australian Property Market didn't Bust but Still Could".

 

Old thread was entertaining with your posts.

I'm looking out for Lindsay's comments on twitter from time to time, will be interesting to see what his response will be. I'm sure it will be similar to keen, next crash 2018. Really hope he gets interviewed by @Jennifer Duke as a follow up to how he got it wrong, or perhaps why it didn't. You can do it Jen.

 

Just curious, is this Lindsay David guy putting his money where his mouth is, by shorting the market?

 

No, he just sells books, data sets, market reports and chart packs. For example, the Perth Market Report 2017 is $29, and the Australian Housing Market Chart Pack is $4,999. Apparently doomsaying is quite profitable!

 

someone on here mentioned never trust a person with 2 first name?

 

and flouting they are 'economists' when in reality they did an IT degree is a joke

That expert economist hogging headlines in Vancouver and Australia? Not 'technically' an economist

this guy just wants to sell books, good on him for flogging himself off as an expert

 

There is currently $9B au shorting the Aussie property market.

This might be Australia's next 'widow maker trade'

"Earlier this year, Sydney-based asset manager John Hempton teamed up with Jonathan Tepper, who runs U.S.-based hedge-fund consultancy firm Variant Perception, for an undercover investigation of Australia's property market. Posing as a gay couple, they drove around Sydney, from glitzy beachside suburbs to the shabby city fringes, to probe potentially risky lending practices. What they found was considerably worse than what they had expected."

 

That article was published in May 24, 2016. I wonder how profitable the 9 billion Australian dollars of Short positions was/will be.

What sort of timeframes are we talking here? Can a short position be held indefinitely? If these investors can hold until next year, they may see a profit? I don't know anything about this.

EDIT: Update on this as of FEBRUARY 25 2017

Widow maker
Betting against the local banks has been so unsuccessful that the trade has been nicknamed the "widow maker."
​

Australia 'one of the best places in the world to short - hands down'

Does anyone know what this means?
@petewargent?

 

LOL - We have similar ones here - posting threads on Commie Chinese causing booms etc.
And being experts in Asian cities when one has never even lived there

 

Yes, there is no time limit on the trades. But if the trade goes long (the banks rise) it is limited by the traders available equity.

 

Shorts have to pay the dividends, and interest. So shorting the banks is expensive.

 

Interesting. Thanks for the info. I guess that's why they call shorting Australian Banks the "widow maker".

If I was going to do it, it makes more sense to do it now. With the IO cliff looming and a house price downturn, I assume Aussie banks will become less profitable?

 

I for one welcome our nationalised bank overlords. So long as they keep on giving me finance.