Australian Apartment Correction: Not Just a Price HikeThe so-called “correction” in the prices in Australian apartments is going to be more than a bad news for Australian Real Estate. If the sources are to be believed, this “correction” is about to heavily decrease the prices for homes in Australia. In addition to this, experts are also predicting a nationwide recession due to the issue. The Australian housing cycle has reached its peak and thus, household debt is certain to extend the property bubble of the country.
Shifting of big banks to have the lending standards tighten is considered the prime reason behind this. For the cheap apartments, this will certainly be a blow. But it is inevitable to spread and lead the defaults for the other smaller developers dropping the construction considerably.
Some dangerous consequences to the current situation are being foreseen by the experts. According to them falling of prices in almost all the areas may lead the country to recession. Almost all the big banks seem to share their concerns on the topic. Right now the scenario is that the debt for a household is overextending Australia’s real estate bubble. Moreover, foreign money’s intervention is also having some adverse consequences on the housing market. According to many big banks in Australia, many developments in Australian Real Estate market are being funded by some offshore banks while money from them has almost come to a halt.
Since last year the prices have increased by almost 7 percent which is a point of concern. For more information on the topic and other Real Estate issues, follow us.