As with the American housing market, the Australian housing market is also under the radar of most economists. Most people do not realize how overpriced houses are in Australia. A similar problem with overpricing the houses in this market occurred in US market. The Australian economy is thought to be on an upswing but that may not be enough to promise that the housing market will not fall through.
Predictions are running wild that the housing prices will continue rising steadily and over the next three years At that point, things will start to fall rapidly. The Australian housing market is headed towards that bubble. Contrary predictions are that everything will be just fine. The economy may be taking some hits, but the resilience of the homeowner finances will prove to have staying power.
Though the housing crisis seems similar to that of United States, the difference is that the owners in Australia do not have the assistance that has been given to some of the homeowners in the US who were given refinancing assistance because the home was overvalued. Australian homeowners will have to repay the full amount of the loan.
One of the challenges that the Australian mortgage lenders is being able to keep lending. Covering the credit for the loans to the homeowners may be a problem and that caused a reduction in the number of loans being given. One aspect that will affect that change is that unemployment must go down for the lending to go up. This is another similarity to the US housing market.
The devastation of the economic crises that have hit international markets is causing problems all over the world. Australia has been one of the developed economies least affected by the global financial crisis. However, there are indications that this might be coming to an end.
Research reports have indicated an increase in housing prices in the three prime areas in Australia. Those areas are Melbourne, Adelaide, and Sydney. The average increase for the three areas is about 9%, especially in Melbourne. The increase for Melbourne last year was over 25%.
The Australian government requested reports that would show housing supply and affordability reform. These reports would be a great indication of what the true situation is. However, these reports have not been produced. The Australian market may have some variation on the housing mortgage crisis but like the US crisis, only time will be able to reveal the true situation.
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