Coldwell Banker Premier Realty

  

Australian Home Price Update

Why it matters for U.S real estate
Posted: September 12, 2011 at 2:23 PM by John McClelland

Long ago we had taken note of the frothy Aussie housing market and noted some parallels between what has been occuring there and what we experienced in the United States. One of these was the "housing shortage" will keep prices up statement. While real estate is a market with a lot of friction, shortages should'nt last long unless municipalities artificially restrict supply through zoning.

Bloomberg talks about the home-shortage myth today: http://www.bloomberg.com/news/2011-09-11/housing-bears-say-shortage-myth-means-australia-set-for-crash.html

http://macrobusiness.com.au/ has provided some interesting entries on price declines which our readers may find interesting. Personally, I am not familiar enough with the Australian housing market to really comment extensively but I think this data is worth looking at. Further, after witnessing the bubbles in the U.S and their subsequent anti-bubbles, I am gunshy of any housing market that has gone parabolic or was parabolic and is now cresting.

My final point is that investing in higher yielding, deflated markets looks to be a better course of action for investors. My local bias is obvious, I think the Las Vegas and Phoenix markets are suitable for a lot of investors and this is something I didn't say in 2007 and 2008.

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