China’s debt shock is coming. Our high house prices won’t protect us
Within three years, Beijing must rebalance from investment to consumption, putting downwards pressure on iron ore prices. Australia’s economy isn’t ready.
Over the weekend, China’s busted property market quietly clocked up another unwanted milestone: house prices have been falling for 40 straight months. October’s rate of decline – 3.5 per cent on an annualised basis – was the fastest in a year.
Countless column inches have been dedicated to China’s property woes in the past decade. But it’s notable that the latest data came just weeks after Goldman Sachs increased its forecast for Chinese gross domestic product growth this calendar year from 4.9 per cent to 5 per cent.
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James Thomson is senior Chanticleer columnist based in Melbourne. He was the Companies editor and editor of BRW Magazine. Connect with James on Twitter. Email James at j.thomson@afr.com
