House Price Crash in Australia Is a Risk to the Global Economy in 2020

Deutsche Bank’s chief economist, Torsten Slok, recently released a note to clients titled, “20 risks to markets in 2020”. The biggest risks include wealth inequality, trade war uncertainty, growth issues in China, Europe and Japan, US government debt levels, interest rates in the US, and declining corporate profits. But coming in at number 19 — House price crash in Australia, Canada and Sweden. Yes, according to Deutsche Bank, the Australian housing market is not only a domestic risk, but a global one. We really do punch above our weight, don’t we? Apparently Brexit is less of an issue than the Australian housing market. Regular Australians are taking on million-dollar mortgages and forcing themselves to overwork to buy the houses they want. What a situation we have a created here in the land of Oz! There’s a meme out there that says Australia is a land of Houses and Holes, that is, the Australian economy relies too heavily on real estate and mining. And I think that’s apt. We’re too busy focused on the wrong things. Instead of investing in Australian science, technology and manufacturing, we’re instead digging holes and building expensive wooden and stone shelters. It sounds like something people were doing 10,000 years ago!

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