Harry Dent says he was early with his dire Sydney price collapse forecast

Harry Dent says he was early with his dire Sydney price collapse forecast
Harry Dent says he was early with his dire Sydney price collapse forecast

There is little doubt the Sydney auction market has started out a lot better in February, than it finished off last December.

At this stage, four weeks in, the positivity has been more evident from the auction clearance rate being on the rise, than prices making any advances.

February typically suffers none of the inbuilt end of year fatigue. Saturday's preliminary clearance sat at over 70 percent.

You never know, but prices could spurt again, especially if our fresh stock levels stay low after the upcoming early Easter break, and the banks begin to ease up on their lending.

It would not be a second wind for prices, because we've already seen that many times, just when the market seemed destined to head backwards.

Sydney is highly resilient when it comes to property price momentum, often catching forecasters out of step.

I was thinking of the contributing mix, intrinsic and not so, when I popped a few questions to Harry Dent, one of the world’s most controversial economic futurists.

He is currently touring Australia. Last time he toured in 2014, Dent's worst case scenario was for a post-China bubble burst impacting on Sydney with property prices possibly set to collapse by as much as 60 percent.

His controversial forecasts were labelled as scaremongering by many commentators including Chris Joye.

Dent's earlier 2011 crash forecast also saw the founder of wealth manager Yellow Brick Road Mark Bouris counter the claims. 

In 2011 on David Koch’s Sunrise program, Dent urged viewers to sell their homes before the 50 percent crash in prices arrived at their doorsteps after a China crash hits our shores.

He will be pursuing the same message this time around.

I told Dent that dwelling prices in Sydney now sit at around a $895,000 median, up from $610,000 in early 2014.

The median represents a significant 46 percent rise since Dent's last warning, and an 80 percent rise since his 2011 warning.

Pressed by me, Dent admits he was wrong through he sticks to the yet-to-occur outcome, merely adjusting the timing of his dire forecast.

"I was wrong, how about that," he said.

"I'm early."

Australia will burst whenever the China bubble bursts, he says.

Dent warns many won't see it coming, and adds that real estate, unlike the stockmarket, won't have any easy escape route, and its recovery will take much longer.

"This is not a normal bubble," he suggests noting the global real estate bubble had extended well beyond typical lengths.

He argues the global bubble has been caused by central banks printing money, not just low interest rates.

Dent says suggests central banks can't keep printing money for ever.

"What's not different is by every measure, is these are bubbles.

"Chinese real estate is a bubble.

"The Sydney real estate is a bubble." 

"Better to get out a little early," he will be telling his 2018 audiences.

This article was first published in the Saturday Daily Telegraph

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.

Sydney Property Housing Bubble

Community Discussion

Be the first one to comment on this article
What would you like to say about this project?