This week's podcast features Dr Cameron Murray, who has the most compelling bull case for housing that I have heard. Not compelling enough to change my mind, but certainly compelling enough to make me reconsider some of my underlying assumptions.
I hope this episode challenges your beliefs as well.
With the COVID-19 lockdown in full swing and unemployment rising, many commentators including Nucleus Wealth are tipping that Australian house prices will fall over the coming year.
Dr Cameron Murray takes the opposing view in our Australian Housing Market Bear vs Bull debate, and believes that Australian housing values will actually rise
Let us know in the comments below who you found to be more convincing
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Thanks for sharing Damien. Seems like the bull case is really in essence about whether further government intervention and low rates can see Australian investors ignore low and falling rental yields and cause one last bull cycle in Australia housing, notwithstanding the dreadful fundamentals for the asset class - before the long term debt cycle comes to an end (if it hasn't already). A lot of optimism is required for this 'greater fool' view given that investors will be betting on capital gains with borrowed money, but given the massive reward for speculation in recent years and the extraordinary policy responses, it can't be ruled out! Low interest rates are in fact a sign of massive underlying deflationary pressure and a weak economy that governments are trying very hard to paper over to avoid asset prices like housing from reverting to their fundamentals, in which case economies would suffer a long overdue cleansing process of all the misallocated capital (of which, I would argue Australian property fits the bill perfectly). Given the costs of buying and selling housing requires a longer term view, it would seem there are better ways for investors to speculate on easy money causing one last bull cycle where they'll actually be able to capitalise on any gains (if they are inclined to speculation like this - I'm not).