Property prices predicted to halve if crisis strikes

THE global economy is facing a downturn more severe than the Great Depression, with Australian property prices at risk of crashing by up to 50 per cent, according to a US financial commentator.

Harry Dent, a US demographer and financial commentator who correctly predicted the 2008 Global Financial Crisis, has warned of a “major political and social revolution brewing” very similar to the American Revolution of the late 1700s.

He argues the global real estate and stock market “bubble”, artificially inflated by central bank money printing policies, will pop within the next five years – but most likely some time between the end of 2018 and early 2020.

“I’m talking about a second global crisis because we never solved the problems of the first one,” he said.

“We have $57 trillion (US) more debt, real estate and stocks are more overvalued.

“I’m seeing signs. Bitcoin finally crashed, the US stock market looked like it was melting down. I think real estate comes next.”

Mr Dent, who is touring Australia to promote his new book Zero Hour, incorrectly predicted a 50 per cent wipeout in Australian property prices in 2014, but believes this time it’s the real deal.

Critics of Mr Dent liken him to a broken clock that is right twice a day, but he says “mainstream media pundits” calling him “crazy, an idiot and a quack” are “nothing new”.

His predictions – the latest in a series of ominous warnings going back decades – include stocks crashing up to 80 per cent “just weeks from now”, real estate prices plunging by 30–60 per cent and Bitcoin plummeting by 95 per cent.

On the plus side, he sees the coming crash as a buying opportunity, with Australia one of the best-positioned countries in the developed world.

“You’re the number one country I would reinvest in,” he said. “You have the best demographic trends because of the quantity and quality of the immigrants you attract from Asia.

“You’re one of the few countries that does not have a demographic slowdown problem like Japan or Germany.

“Your problem is you’ve got the second highest real estate costs compared to income in the world. I see Australia as the best house in a bad neighbourhood, but you can’t escape a global crisis.”

Mr Dent’s warnings are similar to those of economist John Adams, who earlier this month identified 10 signs of looming “economic armageddon”, including record household and global debt, falling savings and the return of risky financial derivatives products.