Pursuits
Australia Housing Shorts are `Widow-Maker' Trades, JPMorgan Says
- Home values may see steady 5% to 10% drop, not 50% crash
- Prices to crash only if unemployment, interest rates rise
Residential buildings stand in the suburb of Waterloo in Sydney.
Photographer: Brendon Thorne/BloombergThis article is for subscribers only.
Australian home prices could wind back slowly rather than crashing, according to JPMorgan Chase & Co.’s hedge-fund sales desk, shooting down a report that highlighted risks in the nation’s housing market.
Home values may drop 5 percent to 10 percent due to an oversupply of apartments and tighter lending by banks, Sujit Dey, the desk’s executive director in Sydney, said in a note to clients. They are unlikely to slump by 50 percent, as two hedge-fund managers had suggested last month, unless there were sudden increases in mortgage rates and unemployment, he wrote.