The biggest culprit here is the RBA. It singlehandedly reignited the Aussie property boom with two additional rate cuts last year,
The RBA, in an epic policy blunder, cut rates twice and reignited the housing boom. And APRA has been powerless to stop the surge in loan growth.
Australians have been lulled into thinking that the secret to wealth involves buying an expensive property, hoping it becomes even more expensive, and then selling it to someone else.
The major housing markets of Sydney and Melbourne continue to bubble over. Thanks to ultra-cheap money, demand isn’t going to pull back anytime soon.
Property prices don’t always go up, and soon they’ll be coming down. It will be a crisis of income that pushes it over the edge.
This property crash won’t impact homeowners in their 60s and 70s too much. But it will be devastating to anyone that’s a recent first homebuyer.
With the Chinese economy showing signs of a healthy recovery, Australian commodity exporters have been recovering in turn.
You might care to note that stocks in the US are trading at all-time highs. This looks very bullish for both the US and the world.
I’ve given up on the great Australian dream. Like most Australians, I was raised to view home ownership as a rite of passage.
You can apply this line of thinking to the Australian real estate market. Governments do everything they can to protect this market.