Friday, June 1, 2012

Moody's: Australia has a significant fall yet to come

Australian houses 'overvalued' (The British English scare quotes are single quotes. How quaint.)

Moody's says that despite a 7% slide, Australian houses are still significantly overvalued. Any chart that goes back 30 years will tell you that. How about this one from the Economist:

Yes, that is a three fold increase from the very stable decade from 89 to 99.
The agency has warned it is considering cutting its credit rating on three of the leading Australian businesses that provide mortgage insurance.

. . .

Moody's is reviewing its "insurance financial strength ratings" on QBE Lenders' Mortgage Insurance, Westpac Lenders Mortgage Insurance and mortgage insurance run by Genworth Financial.

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