US Think Tank Warns That Australia Is About 6 Weeks Away From Housing Collapse, by Tyler Durden.

Over the past couple of months, we have written frequently about the impact of Chinese money laundering operations on home prices in a couple of large cities around the globe.  So far, the Vancouver market has seemingly been the hardest hit with homes prices collapsing over 20% in one month after the city passed a 15% property tax on foreign buyers on July 25, 2016.

Now, a U.S. based think tank, International Strategic Studies Association (ISSA), is warning that similar efforts to restrict Chinese investment in Australian real estate could send prices tumbling there as well.  In speaking with news.com.au, Greg Copley, President of ISSA, predicted that Australia has about 6 weeks before real estate prices start to collapse. …

Back in [April – June], Australian banks began cracking down on foreign purchasers of residential properties due to concerns of increasing fraud and money laundering activites. New rules enacted required borrowers to be Australian citizens and/or legal residents with a valid visa. …

Sydney prices have risen to record levels and currently rank second only to Hong Kong in terms of major cities with the world’s least-affordable housing. …

With Vancouver and Australia now cracking down on Chinese money laundering operations the only question that remains is where the next bubble will spring up to take it’s place?

I’ve seen plenty of predictions for a drop in Aussie home prices before, but nothing has slowed the rush of money into the sector so far. Maybe this time. By the way, the big four Aussie banks are exposed like never before to residential housing prices, with CommBank and ANZ having about 70% of their loans in that sector, in contrast to the typical level of 25% from previous decades. So a 20 -30% fall in property prices across Australia would see a banking crisis of sorts.