Australia’s let to burst housing bubble has today been labeled “a very dangerous and unstable situation” by researchers from Flinders University, lead by Professor Joe Flood. Professor Joe Flood is a housing economist holding a PHD in mathematics, plus a science degree and has 17 years experience in the housing industry with the CSIRO Division of Building Research.
Dr Flood has indicated the “the writing is on the wall for the ‘Australian dream'”, leaving a threat of a US style collapse of the Australian housing market. “The country that promised limitless land, cheap housing and near universal home ownership to all comers now has the most expensive housing in the world amid very tight housing and land markets and little prospect of restoring the balance,” Dr Flood said.
“As long as the government, the public and the media remain in denial, and self-congratulatory rhetoric continues that Australia has cleverly avoided the housing market correction it needed to have, there is little chance that matters will improve. The only ways that this would happen are through a US-style price collapse or a complete re-evaluation of the situation and a coordinated effort by governments, planning and financial institutions to restore the balance between housing supply and demand – or tax away the imbalance – so that all Australians may benefit. ”
The research shows that home ownership fell by 15 per cent between 1986 and 2006 for low and medium high income earners under 45.
“On the one hand Australia is vulnerable to a collapse like the United States, where prices fell by a half during the sub-prime collapse … or to a long slow decline as in Japan since 1988,” Dr Flood said.
» Low and medium-high income earners priced out of property market – The Australian, 14th September 2009.
» House prices ‘need US-style collapse’ – news.com.au, 14th September 2009.