Rapid Home-Price Deceleration:
A More Ominous Recession Warning
Than the Inverted Yield Curve?
Harry Dent | April 08, 2019 | I’m heading back to Australia for a six-city tour – Auckland, Perth, Adelaide, Melbourne, Sydney, and Brisbane – from April 24 to May 3. Usually, I only go once a year. This latest will be my third visit in 14 months. One of the reasons I’m going back is that home prices down under are falling sharply in leading cities like Sydney and Melbourne. In fact, according to local media, the country could see the world’s worst house price fall in 2019. What’s particularly troubling is that this is happening without the anchor of a recession. It’s just a bubble beginning to burst from extreme overvaluations and tightening credit. That happened in the U.S. starting in early 2006. Do you remember that? Real estate prices began falling slowly and the home construction index was already down 60% before stocks peaked in October 2007 and the economy hit recession in January 2008. Then home price started falling rapidly. Well, similar trends in home building here in the U.S., since late 2017, warn of a recession in 2020, with a stock peak just ahead of that. In Australia the decline started in early to mid-2017. In 2018, home prices decelerated to near-zero growth. They’re not declining like in Australia, but they are slowing fast. Look at this chart for a sample of the fastest slowing cities. READ MORE »
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