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Australia also has had a long, rolling property boom, with bank lending behind it all. It didn't pop when expected because our economy was propped up by minera

by 6ren 16y ago

Australia also has had a long, rolling property boom, with bank lending behind it all. It didn't pop when expected because our economy was propped up by mineral/metal prices, due to China's demand and surprisingly little supply from other countries. Both may change.

j2d2j2d2 16y ago
It still has a bubble which hasn't popped. Australia is def a nation to watch.
- bhoung 16y ago
  Crossed my mind to ask if anyone saw any parallels with Australia. Glad to see someone mention it. My rough interpretation of the article is that cheap labour from Poland distorted the Irish economy, and the banking contagion resulted in loans to the Polish who couldn't afford the loans, and subsequently disappeared, especially once the whole economy went sour. An important difference to Ireland's story is that the people who make up Australia's cheap imported labour face greater restrictions in entering the country as they are, with the exception of New Zealanders who are have the same living standards as Australians, international students (and possibly people on working holiday visas) who, to my understanding, are required to demonstrate sufficient funds to get by. Staying on after graduation of whatever course is not guaranteed and has become more difficult post a recent policy change. Australia runs a points system in issuing residency visas and has just cut the number occupations/courses which receive points. My feeling is that the same expectations fueled bubble has arisen here (I'm in Melb) but has been sustained by the resilient resources dependent economy as well as the capital inflows from those who see Australia as an attractive place to invest and/or also live/have a holiday home. "real-estate bubbles never end with soft landings. A bubble is inflated by nothing firmer than expectations." Although the factors driving the housing bubble in Australia are different from those in Ireland, if we concede there is a bubble in Australia, and we listen to economics professor Morgan Kelly, we're due for a crash. A couple counterpoints to the above: China's demand for resources will probably span another two or three decades, and also Australia's financial lending practices are not and haven't been as lax as those of Ireland or the US.
robryan 16y ago
the underlying demand is far different though, the demand for the new housing being built is high. The rental market is also very expensive and has almost zero vacancy. Whereas Ireland sounds like they were struggling to fill the housing being built in Australia the demand for new housing is higher than the rate at which they can be supplied. Maybe at some point things will go backwards but things still look very good in the short to medium term.

by 6ren 16y ago

j2d2j2d2 16y ago

It still has a bubble which hasn't popped. Australia is def a nation to watch.

bhoung 16y ago
Crossed my mind to ask if anyone saw any parallels with Australia. Glad to see someone mention it. My rough interpretation of the article is that cheap labour from Poland distorted the Irish economy, and the banking contagion resulted in loans to the Polish who couldn't afford the loans, and subsequently disappeared, especially once the whole economy went sour. An important difference to Ireland's story is that the people who make up Australia's cheap imported labour face greater restrictions in entering the country as they are, with the exception of New Zealanders who are have the same living standards as Australians, international students (and possibly people on working holiday visas) who, to my understanding, are required to demonstrate sufficient funds to get by. Staying on after graduation of whatever course is not guaranteed and has become more difficult post a recent policy change. Australia runs a points system in issuing residency visas and has just cut the number occupations/courses which receive points. My feeling is that the same expectations fueled bubble has arisen here (I'm in Melb) but has been sustained by the resilient resources dependent economy as well as the capital inflows from those who see Australia as an attractive place to invest and/or also live/have a holiday home. "real-estate bubbles never end with soft landings. A bubble is inflated by nothing firmer than expectations." Although the factors driving the housing bubble in Australia are different from those in Ireland, if we concede there is a bubble in Australia, and we listen to economics professor Morgan Kelly, we're due for a crash. A couple counterpoints to the above: China's demand for resources will probably span another two or three decades, and also Australia's financial lending practices are not and haven't been as lax as those of Ireland or the US.

robryan 16y ago

the underlying demand is far different though, the demand for the new housing being built is high. The rental market is also very expensive and has almost zero vacancy. Whereas Ireland sounds like they were struggling to fill the housing being built in Australia the demand for new housing is higher than the rate at which they can be supplied. Maybe at some point things will go backwards but things still look very good in the short to medium term.