FORECASTING - Aussie property markets firmly on their way to a 2026 peak — but the cracks are already forming in credit...

We’re nearing 18.6 years since the 2008 Global Financial Crisis, and politicians have yet to put policies in place to prevent it happening again.

The costly financial ‘remedies’ adopted after the early-1990s land crash failed to prevent the swiftest and sharpest synchronised global downturn of 2008.  

The financial reforms that followed the 2008 crisis - forcing banks to hold more capital, restrictions on risky trading etc, have not changed the pattern, either.

We are once again nearing the same point with the median sales price of houses sold in the United States reaching its highest point ($423,100) in the first quarter of this year.  

In 2008, taxpayers were punished, bankers got a “get out of jail free” card, and the largest global real estate investment trusts spent $50 billion purchasing 386,000 foreclosed homes, to rent out to previous owners who believed and acted on the lie that “there is no bubble.”

The IMF, and policy makers spent the subsequent years twisting themselves in economic knots trying to pin down a ‘cure’ for the dangers of excessive house price inflation, which they readily admitted lead to most banking crises.

Australia featured in the top five of each of their highlighted risk assessments:

“……our research indicates that boom-bust patterns in house prices preceded more than two-thirds of the recent 50 systemic banking crises…..” IMF “Era of Benign Neglect of House Price Booms is Over” June 11 2014

In the same report following the 2008 financial crisis, the IMF also claimed the ‘neglect of house price booms is over’, but as the rinse and repeat nature of the economic cycle reveals, these economists can’t see.

They ignore the role that rent (unearned income,) debt and the financial sector play in shaping the economy.

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