australia's looming housing bust

Demand for housing finance is collapsing in Australia which will lead to growing stocks of unsold houses. But it's the wave of mortgage stressed home owners that could flood the market with excess supply that would create further panic selling (as we've seen with every other housing bubble in the world, except Australia's - yet).

Australia's level of private debt is the highest in the developed world. It now stands at a record 15 times that of government debt, more than 150% of GDP and at the highest percentage of household income on record. Australia also has the dubious honour of being the only OECD country where private debt levels have risen post-GFC. That increase is entirely due to mortgage debt. But the deleveraging of the debt bubble in Australia is finally commencing and housing is sure to follow.
Credit was the driver of our housing market, as is evident by our record level of household debt to both income and GDP. So it's simply not possible for Australia's housing bubble to stay afloat while housing finance continues to collapse (now down 5 months in a row);

http://www.smh.com.au/business/property/loans-slump-may-point-to-house-price-fall-20100412-s26r.html

As Jim Chanos said, "Bubbles are best identified by credit excesses, not valuation excesses".