PHOTO: ‘Nobody grows up desiring to live in Rooty Hill.’ Source: Supplied

House prices in some “non-aspirational” outer suburbs could fall by 85 per cent and there is “no conceivable reason why some don’t go to $1”, according to a hedge fund boss.

Bronte Capital founder John Hempton, who went undercover with investment expert Jonathan Tepper in 2016 to investigate poor lending standards, says it’s “stupid” that a house in Rouse Hill where “it’s grass to the Blue Mountains” could be worth $1.4 million.

Speaking to The Jolly Swagmen podcast, the renowned short-seller said the “fantasy was deeper” the further they went from the CBD, with Rouse Hill in the north west the “centre of the Sydney property bubble”.

Mr Hempton recalled how he and Mr Tepper, posing as a gay graphic designer couple with “low and variable” income, travelled around Sydney talking to lending officers, mortgage brokers, real estate agents and developers to see how much they could borrow.