Pizza boy with 10 investment properties is canary in coal-mine

In The AFR I argue the Western Sydney pizza boy with 10 investment properties could be the canary in the coal-mine for the great Aussie housing bubble. Goldman Sachs certainly share my concerns, publishing analysis this week that finds Aussie housing is 36% overvalued if our trend rate of economic growth is lower than people previously presumed. Interestingly, Goldman also demonstrate that for foreign purchasers that don't borrow money in Australia our bricks and mortar are actually very cheap compared to New York, London, Singapore and others. The downside risk in the Aussie housing market is exactly why it's so important the major banks build world-class equity buffers while dumb money is still exceedingly cheap, with ANZ obliging with a "surprise" $3 billion equity issue, which we correctly forecast, and CBA next cab off the rank with a mooted $4bn to $7bn rights issue in a week. It is the smart thing to do when your equity is trading at 3 times book value...Click here to read full column for free (VIEW LINK)