Newspaper article The Daily Mercury (Mackay, Australia)

Housing Crash Report Wrong

Newspaper article The Daily Mercury (Mackay, Australia)

Housing Crash Report Wrong

Article excerpt

THERE'S nothing like the prediction of a property crash to grab headlines - and the recent program on Sixty Minutes certainly did the job.

It featured London economist Jonathan Tepper and Sydney fund manager John Hempton, who seized upon the problems of a couple who had over-borrowed to buy property in mining town Moranbah and were facing bankruptcy.

They then claimed Australia had "one of the biggest housing bubbles in history" and forecast falls everywhere, including up to 50% in Sydney and Melbourne.

Their conclusion is so full of holes it's hard to know where to start. Think of the fundamentals. Last year's intergenerational report forecast that within 40 years the population of Australia would be in excess of 40 million. The majority of those will want to live close to the city for the facilities that city life offers.

Tepper tried to draw parallels with the housing crash in America, but a major point of difference between Australia and America is the way home loan mortgages are structured. …

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