Economist WARNS: Australia Will Break the Record for the Biggest House Price Fall in History

Structural economic shifts and profligate government spending are driving persistent inflation and threatening a severe recession. Australia’s reliance on massive debt accumulation and high migration levels exacerbates these pressures, fueling a housing market correction that is already producing record price declines. Historical parallels to the late 1990s tech boom suggest that current market exuberance and rising bond yields signal an impending period of economic contraction. To restore stability, the government must prioritize fiscal discipline by reducing the public service, curbing migration, and liquidating assets like the National Broadband Network to pay down debt. Investors should maintain liquidity through cash-like, floating-rate assets while avoiding cyclical and illiquid sectors, as central banks shift toward a "hard money" stance that prioritizes inflation control over economic growth.