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hen the global financial couples, millennial buyers and those credit scrutiny and general lending
crisis began in 2007, the with a less established credit history, policy, most homeowners may not
Wearly tremors remained were routinely priced-out of the need such large loans to secure their
below the surface for quite some marketplace. dream home after all. This puts those
time. With subprime mortgages Foreign investments in Australian currently in the market for a home in a
being bundled and sold in bulk homes only fueled the fire higher still, favourable position to find real estate
below the radar, the collapse of alongside historically low interest deals that are more affordable today
U.S. investment banking institution rates. Suddenly though, the picture is than they were just 12 months ago.
Lehman Brothers on September changing (never a dull moment when This is particularly significant
15, 2008 finally catalysed a global it comes to macroeconomics!) and it’s considering the rapid pace of
recession that had been in the once again time to take stock of the economic growth in Australia over the
works for long before global landscape as it exists here and now. last five years. It’s quite remarkable to
markets were sent into their find that prices are now beginning to
dizzying tailspin. Tightening Credit drop, even if slightly and gradually.
As this collapse began to impact Policy As reported in The Sydney Morning
financial markets, (here’s a wonderful Amidst all of this growth, the Herald as early as mid-September
HOW TO BENEFIT the impact of this global financial has continued to tighten lending capital cities are steadily declining for
chart that helps to contextualise
Australian Royal Banking Commission
2018, home prices in Australia’s
policy to bolster its new and
crisis over time) the Australia Stock
the first time since 2012.
Exchange (ASX) took a direct hit that
The Reserve Bank of Australia
outspoken positions on responsible
FROM TODAY’S closely emulated the decline in the lending, making securing credit an made headlines when they released
intensive and detailed process that
minutes that declared the following:
U.S. marketplace.
now requires heightened financial
Fast forward to our current market
conditions a decade later, and the
awareness.
“Established housing
While this may help to alleviate
RESIDENTIAL way, with investors and homeowners future financial risk over the long-term, market conditions overall
momentum has swung back the other
enjoying powerful market gains across
it also makes it increasingly difficult for
continued to ease. […]
those in need of a loan to understand
major indexes, resulting in a ferocious
what financial factors they need to
bull run that has only just shown signs
Housing prices had been
MARKET of slowing within the last few months. calculate and how they can position falling gradually in Sydney
themselves for success amidst these
Australian Home
rapid changes.
and Melbourne, and
Owners Market
VOLATILITY In the Australian market, and Falling Home Prices in recent months price
While credit policy has been
specifically the Australian property
declines had become
tightening, average home prices
market, this bull run gained particular
have been falling and it seems that
strength from 2015 onward, peaking
more widespread across
in mid-2017. Current homeowners
enjoyed marvelous appreciation of the real estate bubble is beginning to different suburbs and price
pop (or at least shrink). This means
UNDERSTANDING THE CURRENT MARKET CONDITIONS. home value, while those still looking that although it’s harder to secure
to purchase a home, such as young sizable loans based on more intensive segments.”
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