Nobel Prize-winning economist Joseph Stiglitz told a Sydney forum on Friday that “There is the beginning of a cause of concern, and it would probably be prudent to take some actions” on our housing bubble. Professor Joseph Stiglitz was a former world bank chief economist.
His predictions could be on the money if mortgage approvals is anything to go by. The ABS has today released Housing Finance Data showing once again finance commitments for owner-occupied housing fell 3.9 percent for the month of June and 28.4% from its peak last year. Economists had only expected a 2 percent drop. The number of approvals have not been this low since 2001.
AMP Capital Investors chief economist Shane Oliver said “It’s basically telling us the housing recovery that we’ve seen over the last 18 months has come to an end,”
CommSec economist Craig James also expressed concern, saying “In the last couple of months, investors had served to prop up the overall market but that wasn’t the case this time around.”
» Forever blowing bubbles – The Sydney Morning Herald, 9th August 2010.
» Home loan approvals weakest since 2001 – Yahoo 7 Finance, 9th August 2010.