Martin North presents property bear case to fundies

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Good stuff here from Martin North:

This very much reminds me of the 2003 Sydney bust. The west continues to fall as the east rebounds. This will lead to stagnation in time as the “move up ladder” stalls with western households trapped in negative equity.

The difference this time is that in 2003 Sydney was rescued by the huge income gains that flowed from the mining boom. This boosted households via wage and rental gains. This time both are falling as well.

This has L-shaped recovery written all over it, and bull trap when we add any external shock.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.