More vacant US properties for sale than entire housing stock of Australia

Compare shares brings us comments from National Australia Bank's (NAB) chief executive John Stewart, who says the bank has no more exposure to the troubled housing market in the United States but expects the situation in the US will worsen. On Friday, the National booked a $830 million write-down on risky US mortgages, which sent the bank's share price plummeting.

"This is the bottom for us for housing in the US because we are now cleared out," Mr Stewart told ABC TV. Mr Stewart said the situation for the US housing market would probably worsen. "Things are going to get worse," he said. "There are more than 18 million vacant properties for sale in the United States just now. That's more than the whole housing stock of Australia."

Mr Stewart said that even before the US housing crisis started, house prices were dropping as a result of over-stocking. "They had just built too many houses, so the market was soft," he said. "Then you got the crisis that started with sub-prime that has now moved into different asset classes". He said it was a worrying time for the US economy and it would be some time before it recovered.

NAB may have no exposure, but if the US goes into a prolonged recession, then so will Australia and the rest of the world. In fact if it wasn't for the resource boom, Australia would already be in a recession. The other side of this argument is that the US market could be bottoming at the end of the year and it may be a good time to invest in US related equities. The best way to do this via a managed fund.