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

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…

Australia Housing Shorts are `Widow-Maker’ Trades, JPMorgan Says

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