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Residential housing overvalued by 20%?

Discussion in 'Property Market Economics' started by Nigel Ward, 22nd May, 2008.

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Nigel Ward Well-Known Member

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1st Jul, 2015

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Intelligent Investor is making this claim. By world standards from various research reports I've read that may be right...Is anyone going to the II seminars being held in Melbourne (this weekend), Adelaide or Perth?

If so please report back!

Residential housing AT LEAST 20% overpriced

It won’t make us popular but that’s what we think. And we’ve got the facts and figures to prove it.

They’ve been happening all over the world but Australia’s property boom has been one of the juiciest. We now have one of the highest ratios of property prices to income in the OECD, and a population that thinks ‘property can’t fall’. That’s a recipe for disaster.

So what, you ask? What’s that got to do with picking stocks?

Well, at $3.5 trillion, households’ investment in residential property is seven times larger than the wealth tied up in the stockmarket. A lot of plasma TVs and fuel guzzling Ford Territories have been bought on the back of a booming property market and easy credit. For the banks, property developers and anyone earning their bread from the Australian consumer, a 20% fall in the property market would be a disaster.

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Nigel Ward, 22nd May, 2008

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