Did we see the housing market crash coming?

I’ve written before about my (rough) estimates of where the housing market is headed (here and here). John Hewson recently wrote a paragraph that would fit perfectly into a retrospective on how we should have known there was a housing bubble:

Housing prices have risen by more 250 per cent in real terms since the mid-1990s, with the median house price in Sydney now well above $1 million. Household debt is more than 200 per cent of disposable income, and greater than 120 per cent of GDP. Total taxes, charges, levies, and fees, from all three levels of government, can account for as much as 30 per cent of the cost of a house.

He later mentions that there might be a bubble:

However, our whole system is at risk of a significant drop in house prices as, indeed, was the US/global financial system in the run up to the global financial crisis, where the mountain of debt was built on a US sub-prime housing loan, which was simply a punt on house prices not falling.

Our banks are, today, heavily exposed, having become essentially building societies that also issue credit cards. These exposures are over and above their considerable climate exposures – not just to mortgages on coastal properties, and to fossil fuels, but more broadly.

The risks being run actually dwarf those of the GFC. If it goes bad, the government will be called on to intervene.

For the sake of making concrete predictions – probably by end 2018:

• There’ll be some kind of a trigger. Possibly a further tightening of capital controls in China, possibly an interest rate hike, or maybe enough articles about a housing bubble will finally get written. Or perhaps a set of budget measures that restricts negative gearing.
• House prices will fall. More than five per cent.
• At least one, possibly more of the major banks will need some kind of financial support when the wholesale funding dries up. Look for the RBA’s CLF to be used, or AOMF purchase of RMBS.

Just a guess. But I reckon a good one.