Credit: Christopher Joye
It would appear that my old sparring partner, Associate Professor Steve Keen, has once again got his calls wrong.
Following the release of RP Data-Rismark’s June house price index results, which recorded the first fall in Australian home values in 17 months, Keen wrote with glee that he expected to see "an accelerating rate of decline in [Australian] house prices now, as they did in the USA when 'flip that house' ceased being a winning trade." That’s right – it was a bold bet: an “accelerating rate of decline”.
Now remember that this came from the same man who during the GFC told us that the price of Australian housing was going to "fall by 40 per cent or so within a few years", that a depression in Australia was “almost a certainty … best case scenario is a recession more severe than 1990 lasting one and a half times as long” and that Australia’s unemployment rate would rise to “double digits”. You get the drift. Of course, it makes for terrific media fodder.
Sadly for Dr Keen, RP Data-Rismark’s July house price index results have proven him wrong yet again. After a large 1.0 per cent seasonally-adjusted fall in the month of June, Australian home values were little changed in July, recording a raw increase of 0.1 per cent (+0.4 per cent seasonally-adjusted). The previously-reported June quarter result was revised down slightly to -0.1 per cent (was +0.1 per cent). Put more bluntly, there is no acceleration in house price losses to be seen here.
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