Problem with Australian is no one has actually got burnt before. Like the recent new article stated “complacent”.
Interest rate going up is something unavoidable.
I say this will be a classic and painful example.
Since the 08 financial crisis, rates had been dropped to its lowest. Low cost green notes and Reminbi flooded worldwide.
Old property exchanged hands, non-stop new projects.
Average working Australian family jumped into property market assuming the rates would continue at this level for the next 30 years, meanwhile enjoying the capital gain.
Australia is a county where the supply of land is the least thing to worry about. That’s ok if one argues the value of really inner city, prime land supply. I tend to agree with that, but it is a different topic.
Now we are facing the pressure of upgoing rates.
Clearance rates are the best indicator.
One family one mortgage is less vulnerable, but the problem is with the multi mortgages families in the name of INVESTMENT. No one can actually save them.
Don’t think price will collapse overnight, but soft landing is sometime more painful than a hard landing.
