"Dent thinks that an imminent bursting of a credit bubble in China could rock Australia's economy and see prices fall by up to 50 per cent. Steve Keen has forecast similar declines but over a 10-year time period."
Most say that these views are of nutters, and so far most appear to be validated to a degree. But my concern is this; should those views ever come into effect, then the outcome would be even worst than forecast simply because of the inconceivability of it ever happening in the first place. That unlikelihood belief has been the sole factor in the activity of speculation: for a perceived guaranteed good return will always punish at the end of its cycle. The buyers in Melbourne that were buying on the premise that the prices will rise to offset the massive borrowings have simply vanished.
Keen could be correct in that property values will adjust downwards to their yield outputs where they'll finds their true value. Until then, it remains a guessing game for all concerned and our economy in the south will continue to have a sombre aura about it.
