An American economist famed for apocalyptic predictions has forecast the n housing market could crash by as much as 50 per cent.
However, the prediction by Harry Dent was met with scepticism in some quarters because it echoed similar doomsday forecasts he has been repeatedly making for well over a decade, which have mostly failed to materialise in that timeframe.
Mr Dent, who is economic demographer and a bestselling financial author, issued his grim warning about about n property prices on Channel Nine’s 60 Minutes.
‘If you buy a house now I am predicting you could lose as much as 50 per cent, give or take, in the coming years,’ he told interviewer Dimity Clancey.
Mr Dent had stark advice for those considering buying a home and homeowners.
‘For a young person, I mean my advice is very very simple, if you have not bought your first home yet do not,’ he said.
‘If you sell now you’re going to be ahead of the crowd and then when things go down you’re going to be able to buy at least twice the home for the same price and mortgage that’s the bonus.’
To support his prediction, Mr Dent said in the last major downturn US house prices fell 34 per cent for average home and 50 per cent for more upscale ones and ‘people said that couldn’t happen’.
‘I think this is a bigger bubble,’ he asserted.
‘I think it’s going to start in the second half of 2024 in the US and spread.
‘I think the US is going to start a recession that spreads around the world because this is a global phenomenon especially the real estate bubble, it’s everywhere.’
Mr Dent’s belief is that since 2008 the world’s economy has been totally driven by government financial stimulus which he said was not ‘sustainable’.
‘Having that much stimulus in the economy is like taking a powerful drug,’ he said.
‘It cannot work out well, you’ve got to detox at some point, that’s what this is a worldwide detox of debt and real estate and asset and financial asset bubble.’
However, Mr Dent’s dire warnings were scoffed at by ABC show MediaWatch on Monday night.
Host Paul Barry said Mr Dent’s predictions of ‘housing Armageddon’ were part of a track record that was ‘beyond ridicule’.
Barry showed that as far back as 2011 Mr Dent had been predicting, almost every year on n TV, that the housing market would crater within a few months.
In 2011 he gave same advice to house shoppers, that they shouldn’t buy, as he did on Sunday night.
‘Any young couple who followed Dent’s advice in 2011 would be well and truly screwed and locked out of the market because house prices in the major cities have doubled since then,’ Barry said.
Barry pointed to a quote from developer Harry Triguboff in the 60 Minutes story that ‘demand has never been so great, the supply has never been so little’ to explain why Mr Dent’s predictions were unlikely.
Economist Stephen Koukoulas told MediaWatch that ‘it would be wild in the extreme to think house prices could fall even per cent’.
In response to MediaWatch’s suggestion that he should retire having been so often wrong, Mr Dent was unrepentant.
‘I have not and will not stop warning that this is a bubble,’ he told the program.
‘I will recant by the end of 2025 if there are no signs of a crash by then and just retire, perplexed, but for now I am sticking to my guns.
Mr Dent can point to a couple of times his pessimistic outlook was justified.
He accurately predicted the asset price bubble in Japan would burst, which it did in 1991, and also correctly forecast the long recession which followed.
His warnings about a US housing bubble were vindicated in the huge downturn in 2007 that turned into the Global Financial Crisis.