Professor Steve Keen on The 7:30 Report

By Darryl Stringer • Oct 10th, 2008 • Category: Finance, Property Prices

According to Professor Steve Keen, Australia’s property market is set to drop. What we’ve seen in America has been bad, but what we might be about to see here could be nasty. But then you’ve got other people (especially real estate agents) saying that supply is still outstripping demand, and therefore property prices can only go up.

Given what has happened today on the Aussie stockmarket, I don’t think anyone really knows what’s going to happen to property prices in Australia. Demand for properties is high, the stockmarket is crashing, and interest rates are falling and will continue to drop. Each of these factors on their own would ordinarily have a very different impact on property prices. We could conceivably drop dramatically, remain steady with demand counterbalancing any possible drop, or a steady climb in values. To be honest, no one really knows what’s going on.

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