American finance websites commenting on Australian property.....
Every housing bubble requires the connivance of the banks and their regulators, and Australia is no exception. A banking scandal of enormous proportions has partially come to light via the Royal Commission investigation
1/ Australia doesn't have jingle mail.....so borrowers are unlikely to leave banks on the hook for anything.
2/ Australia has 2 big cities and 5 country towns.....so borrowers tend not to sell because they are moving interstate for a better job.
3/ Australia only has 2 "high cost cities" eg imagine trying to work out cost of living in the USA if 50% of people lived in LA and NY......
4/ Unless you bought in the last 6 months of the peak.....you are still in the money. eg 15% up in 2017 means down 5% you are still ahead.
5/ We don't have strippers buying 5 properties (well not as many as the USA) so you wont have a Las Vegas style contagion happening in Australia.
Instead what will happen is, as banks increase mortgage rates due to RBA and out of cycle mortgage increases....hard working people will pay down their debt and reduce leverage.
Oh and people wanting a 40% crash so they can "get in to the market" are still going to be whining in 5 years everything is still too expensive.....
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