Harry Dent is back predicting property prices will "fall 50%"

Australian residential prices remained “40% overvalued” and the bubble is yet to burst, the international doomsday commentator Harry Dent has claimed.

Australia was going to lead the next global bust, he said.

Dent forecast “Australian prices would fall 50%” in the next downturn and he ranks Australia as the third most overpriced market in the world, coming in behind Hong Kong and China.

“Don’t take the ‘oh, we had a little crash and it’s over, time to buy again because we don’t want to miss out’,” Dent said.

“Real estate, mark my words, will in five, 10 or 15 years time never be better than this. The best cities, Sydney and Melbourne, are going to go down more than say Adelaide. Rich people will lose the most money,” he tipped.

Dent again claimed that Australians’ exposure to a weakening Chinese economy would be the primary trigger of the downturn.

“It’s going to be more pervasive,” he said ahead of his seminar tour to Sydney next month.

He said while Australia escaped the worst of the global financial crisis, it would not avoid the next global downturn, which would be worse than the 1929 depression.

Dent says the recent Reserve Bank of Australia rate cuts would only exacerbate the looming correction.

“Maybe we’re over-forecasting this, that’s possible, but there’s not much upside in real estate anywhere in the world left after a bubble this size,” Dent added.

“Your great Australian real estate bubble is going to burst … maybe I am wrong, maybe it’s 30 or 40%.

“But there’s no way real estate is going to go up much further … and there will be no soft landing,” he said.

When Dent was on his 2016 tour he forecast a 50% fall. However, Sydney prices rose by 75% after that forecast, followed by a 15% decline over the past two years. Dent gave his latest forecast to Martin North at Digital Finance Analytics, who noted that debt is higher than it’s ever been.

“Yet the Reserve Bank here is basically encouraging people to get into the market now to try and support the economy,” North said.

Dent’s latest doomsday claims have been slammed by mainstream property analysts.

“He has never been correct on the Australian housing market,” the boss of SQM Research Louis Christopher said yesterday.

“I am concerned for people who get hoodwinked into his seminars,” Christopher added.

Property economist Dr Andrew Wilson said Dent was a “discredited doomsayer”.

Wilson said that the bubble collapse claims were “click-bait”.

“And, as usual, outrageous predictions of steep and sustained house price declines will prove to be so much nonsense — as has clearly again been the case this year,” he said.

“With the prospect now of a lengthy period of relative certainty and predictability ahead, buyers and sellers will increasingly ignore the snake-oil salesmen and take advantage of the ongoing benefits of home ownership and investment,” Wilson said.

This article first appeared in The Sunday Telegraph.