US doom merchant forecasts Australian property crash
China’s 'bubble economy' will trigger a collapse of Australian property prices, a renowned economic forecaster has warned.
>US demographer Harry Dent said Australia was heading for trouble because of its close economic ties with China, which he called “the biggest bubble I have ever seen”.
Mr Dent said during a visit to Australia that the China bubble was set to burst.
“If Australia was left to its own demographics and trends, it wouldn’t have a big downturn on its horizon,” he told Real Estate Business'
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“China is overbuilding everything, pushing uneducated people from rural areas to urban [areas], thinking one day, hopefully, they become consumers, and having them build stuff for nobody…this is crazy stuff.
“It’s fine to do that at a certain rate, but they are overdoing it. Price to income ratios in Chinese major cities is 30 times income.”
By comparison, they are 10 times in Sydney and Melbourne, the same level at which California peaked and the bubble burst, Mr Dent said.
“I think the rich Chinese have all their money in real estate, both at home and abroad, and they are going to get hosed so bad their savings will dissipate and they are not going to be running around bidding up real estate in Australia or anywhere else.”
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