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Why the Australian housing bubble is not going to burst in the foreseeable future…

Firstly, if you were to plot a graph of average Australian house prices for the last 117 years from 1900, you will see there was never been a crash in housing prices in Australia.

Yes, there have been minor corrections, small drops, and periods where prices have not moved up. But in over 100 years... Just a minor drop after the second world war to 1950, but no crash even during the recession of the 1991 or the GFC.

The Australian housing market has proven to be highly resilient and bucked world trends when house prices collapsed in the US and parts of Europe.

Now let’s talk about the Chinese investors, as I believe this is what will keep prices from crashing in the long term ...

Let’s analyse why they want to invest their money in the Australian housing market….

There are 3 major reasons….

Reason 1

The Chinese are long term planners and thinkers, they think about not only about their future but the future security of their children and grandchildren, more so than us Westerners…. Now keep this in mind as I continue….

How many people here realize that you cannot actually buy a property in Mainland China?

Yes, that’s right, even as a Chinese citizen…. You can only buy a 70 year lease on the land, and after that period has elapsed, there is no guarantee that your lease will be renewed, and the house you have built on that land can revert back to the communist government. All land is owned by the government.

Now, as the Chinese think long term, and for their children and grand children… Why invest money on property that you might never be able to pass on down to them, as you can in Australia.

Reason 2

There are 1.387 Billion people in China.
Now lets assume that just 0.5% are wealthy enough to want to invest their money in Australian property…. That’s approximately 7 million people!
In fact there are now over 1,000,000 millionaires in China.

Now compare that to the Australian population of 24.6 million people, and you soon realize that there is no shortage of Chinese wanting to invest in Australia for many years to come!

Now, I hear people saying…. “Ah, yes… But what happens if the Chinese economy starts to slow down? …. That will lead to a slow down in Chinese investment in Australian property!”

Well actually…. No… Just the opposite will happen.

If China slows …. The wealthy Chinese will be pulling their money out of the stock market and China, and will instead want to invest in Australian safe bricks and mortar more than ever!

Reason 3

Australian properties are still considered “cheap” by Chinese investors compared to similar real estate in good areas in Chinese cities and of course with a 70 year lease and no title for life.


So those of you waiting for the bubble to burst so you can maybe get into the property market …. Think again… It’s not a bubble … It’s a hot air Balloon that’s not landing anytime soon!