Pop goes the Property Market by James Reed

The governor of the Reserve Bank has warned that the debt-mad property market in Sydney and Melbourne, which is the bulk of Australia, is about to face big problems. (The Australian, April 5, 2017, p. 1) First, banks are lending to people who have no hope of repaying their debts. Second, because of this, household debts are rising more than twice as fast as household income.

A repeat of the 1890s great property collapse, caused by a housing land boom could soon be repeated, where half of all banks closed. One segment of the financial elite class has poo-pooed all of this, saying that it has a low probability of happening. I would like to know who gives them their probabilities. Anyway, even if this was so, the consequences will be catastrophic for protected little Australia. We are only just getting the unhappy scenario of people living in cars and under bridges common in Europe and the United States.

I emailed Uncle Len at This email address is being protected from spambots. You need JavaScript enabled to view it., don’t you mind, about the living under bridges scenario, and he said that he is busy at work on a book which he hopes the League will publish on the best bridges to live under. I could barely read his scratchy handwriting in the email (for some reason, instead of typing, this eccentric scanned his handwriting to a Word doc then sent that, something which I never thought he could do), but I did read “climate is everything.” We don’t usually have snow, so that will make life a little easier for the crowds of homeless.

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