Why Australia is set to follow US path of house price doom

26 03 2011

Money Morning reader David wrote us an interesting note about the fall of house prices in the UK:

“I remember living in the UK sometime around 2006 – 2007 and house prices, like Australia now, were overvalued.  As soon as property went on the market they sold at crazy prices…

“Just as you predict here in this email house prices crashed about 18 months after their peak.

“The media blamed it [falling UK house prices] on the world financial crisis, which did have an impact but they were already on their way down.

“So many people forget a house is only worth what someone is prepared to pay for it.”

As time passes there’s always the tendency to compress events.  Looking back now, it’s easy to think all the economic problems started in September 2008… around the time Lehman Brothers collapsed.

But that’s not the case at all.

For starters, the stock market peaked in October 2007.  By the end of September 2008 – before Lehman collapsed – the Aussie stock market had already fallen 27% from the peak…

An article definitely worth reading…find the rest at this link.

Why Australia is set to follow the US path of House price doom

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