Nonsensical Property Shill Quote of the Day

Just when you thought you wouldn't see anything stupider than Robert Gottliebsen's latest column for a while, here's a wonderfully nonsensical quote from Australian Property Monitors chief economist Dr Andrew Wilson in the Australian today.

"What we are seeing in Melbourne is a pause in the market, mostly caused by a fall off in the bottom end of the market, but it's not a bubble," Dr Wilson said.
"The market was unsustainable because it couldn't be sustained by incomes, but now we are starting to see wages growth that will again fire up demand."

So the market was "unsustainable" and couldn't be sustained by incomes, but no, we are not in a bubble. According to the latest data from Demographia, Melbourne is currently the 7th most unaffordable housing market in the world, with a median price/income ratio of 8.0. Let's assume that a ratio of 5 (roughly the level of Toronto) is more reasonable. Now, through the amazing powers of arithmetic, I calculate that we could either get there with a 37.5% fall in prices, or a 60% rise in incomes, or some combination of the two. 

Dr Wilson has categorically stated that we are not in a bubble, but he doesn't seem to expect prices to fall. Instead, he expects affordability to be restored by wages catching up. Now admittedly I have plucked the price/income ratio of 5 out of thin air, but how on earth does he expect wages to rise by 60%, or even half that, any time soon? WTF??

To end this post I would like to dedicate this clip to Dr Wilson.