Australia headed for property bloodbath - economists

Things are looking really really bad. And SSJoe doesn't seem to know. Yep, our treasurer claims there is no bubble. Lovelly :s

Mr David and Mr Soos believe the bubble is worse than the bubbles of the 1880s, 1920s, mid-1970s and late 1980s and while they can’t pinpoint what will cause a collapse they are certain it will happen. 

“These metrics point to the beginning of the housing boom in 1996 and peaking in 2010, though the latest booms in Sydney and Melbourne could result in posting new peaks in terms of the(price-to-rent) ratio,” they wrote. 

“Housing prices across all capital cities remain grossly inflated relative to rents, income, inflation and GDP. What event or set of events triggers the beginning of the end of the housing bubble is not yet known. 

“A bloodbath in the housing market, however, appears a near certainty due to the magnitude of falls required for housing prices to again reflect economic fundamentals. The largest residential land market bubble on record is truly incomparable and dwarfs earlier speculative episodes in the commercial and industrial land market.” more