I agree. That why I maintain I'm neither a property bull nor bear. Just someone who invests (hopefully) optimally with respect to the timing of asset price cycles.
Saw an opportunity as we approached the eye of storm in the GFC (and came the bargain basement shares sales of the century).
I knew the US subprime timebomb would blow up big time resulting in systemic risk to the banking sector. But didn't foresee the rapid domino effect which was really scary.
Just like then, nobody bothered about housing bubbles there or in Europe. There was one economist (Roubini) who said the subprime thing would bring the house down. He was a laughing stock on Wall Street and main street. Now he is worshipped and more of a hero than Bernanke himself.
The violent deleveraging after a debt fuelled bubble is exactly why the Oz housing is so dangerous IMO. It's was already way overdue for the big bang. Then came the panicked policy in the face of the GFC in the form of FHOG for new/existing homes (the latter could only have been designed for pushing up prices). The withdrawal symptons alone won't kill the junkie so quickly if it weren't for the RBA having also panicked and now 60 year old emergency rates have to be unwind.
Our debt levels and degree of house price inflation is much worse than what happened in the US. You may look at Australia right now as one BIG Las Vegas, Cleveland or Stockton. The omens aren't good.
