House 'buyers strike' attempts to cripple the market
An online campaign launched by tax reform group Prosper has called on prospective house buyers to abstain from buying at Australian auctions in the coming weeks.
The social media campaign that is gaining traction on the popular activist site GetUp! argues that a widespread house purchasing strike will inevitably bring the prices down to a more affordable level.
Australia is well known for its highly priced real estate and is considered to be one of the most overvalued housing markets, according to a survey conducted by the Economist magazine which calculated that they are 56 per cent over-priced.
According to the Australian Bureau of Statistics capital city price index Australian home prices have increased 77 per cent from December 2002 to the end of 2010.
Prosper suggests that a house price bubble is 'imminent', stating that warnings have been issued by a long list of agencies and experts, including the IMF, the OECD, The Economist newspaper, Jeremy Grantham and Steve Keen.
The campaign urges to people avoid buying into overpriced real estate and risk being hit with a severe housing price drop and overinflated debt repayments.
"When the Great Australian Land Bubble bursts – just as land bubbles all around the world have – the freshest buyers are totally exposed.
They face financial ruin as house prices fall below their debt. The crippling mortgage repayments become pointless,” Prosper campaigner David Collyer says.
Collyer and Prosper say that a protest-like strike is the only way to respond to 'ridiculous' current land prices.
"Some argue prices have arrived at a new and permanently high plateau, but the historical record shows reversion to the long term average – in every case without exception." Collyer says.
The Prosper website notes that there are over 900 Melbourne auctions scheduled for the weekend and 2700 over the next three weeks. Prosper believes this enough to decisively tip the market into oversupply.
