This guys prophecy of impending doom in the real estate market has got me wondering what actually happens to existing mortgages if suddenly house prices crash by say 30%.
Will the banks be able to suddenly demand large increases in mortgage repayments as i think happened in America resulting in lots of forclosures?
This is very likely I think as I think most new home buyers are borrowing far too much relative to their ability to repay!
Nightmare vision of impending property crashAmerican economist and demographer Harry S Dent jnr says there is a bubble in Australian house prices and we should brace ourselves for a spectacular collapse starting this year.
Dent is in Australia to speak at seminars and to promote his book, “The Demographic Cliff”. He says that house prices are unsustainable and will fall by at least 27 per cent in Sydney and Melbourne over the next several years.
Your real estate is so high it has to come down.
Dent told Money in a video interview that the trigger for the collapse of Australia's house price bubble will be the bursting of the Chinese house bubble.
How high can property go?
Dent says Sydney and Melbourne property markets are being held up by foreign buyers and that cannot last forever.
“China has a bubble [in house prices] that makes Australia's look like nothing,” he says.
“I think China's bubble is going to burst and I cannot see any way that Australian property prices can keep going up," he says.
If his forecasts do not come true it will be because governments “wave the magic wand and kick the can down the road again”.
The Reserve Bank of Australia and most Australian economists say there is no bubble in Australian house prices. But Dent is sticking to his guns.
“Nobody in real estate development or government can afford to say that 'we have got a bubble',” he says. “They will always say it is not a bubble”.
But what of our special factors - we are a very large country with a unique economy and most of the population concentrated in a few conurbations - don't they count against the general rules for bubbles and their ending. Dent says he has studied every bubble in history and every time a bubble comes whether it is in tulip bulbs, gold, stocks or housing they are always described by those on the inside as being different, and unlikely to burst.
“I am saying that China has the biggest [bubble] and that is going to trigger [the bursting of] your bubble. Your real estate is so high it has to come down in the next few years."
Read more:
http://www.theage.com.au/money/investing/nightmare-vision-of-impending--property... Friend, whether they do or not, a Big Reckoning is coming, from the sounds of it from them fancy experts and such with degrees.
. Boomers are doing fine, although I aint a boomer, being older and such, and we've done well too friend, and I bought my first house here decades ago for less than the cost of a European Car, and exchanged it over the years to my fine apartment here in the CBD of Brisbane Town which is now worth near one million dollars friend, so I believe it's been good. Must be the largest bubble in history though. Prices here have gone up 1200% over the last 30 years or such.
Forum
Pages: 
