Admittedly, I don’t follow the Australian housing market closely, however, along with Canada, two of the world’s never-ending housing bubbles do show up in the news from time to time and, upon reading this report at MarketWatch, I couldn’t help but think back to the similar housing market optimism expressed in the U.S. about five years ago.

House prices fell 2.4% in the September quarter of 2011, accelerating from a drop of 2% in the June quarter, according to a survey by National Australia Bank, released Wednesday.
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The September survey indicated that Australian house prices are likely to remain subdued near-term and fall by a further 1% over the next 12 months.
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By September 2013, house prices are expected to be back in positive territory overall and showing growth of 0.5%, according to the survey. Western Australia is expected to lead the growth, with prices forecast to rise by 3.4%.
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National Australia Bank economists said that they believe the expectations contained in the survey are overly pessimistic.

“A structural shortage of housing remains nationally, commencements are down, interest rates are expected to stay on hold for some time, and the unemployment rate is low, contributing to high job security. These factors are expected to maintain a floor under house price growth, which we see resuming at below 4% in 2012 after drifting down in 2011,” they said.

Well, at least they didn’t say that home prices have never declined nationally since the Great Depression, as Fed Chief Ben Bernanke did right at about the time that the U.S. housing bubble reached its maximum inflation.

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