Categorized | International

Major Crisis in Australian Housing Market a Real Possibility

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Analysts warn that the current conditions in Australia’s housing market indicate that a potentially major crisis may impact the nation in the very near future. The current data figures within the residential real estate market in Australia point to a highly realistic possibility that the housing market could experience a crash that would cripple the Australian economy similar in a fashion similar to that which happened in the United States.

Overall construction in the Australian housing market has experienced an enormous drop, and the overall supply of unsold homes continues to increase out of control. Home building activity has dropped roughly twenty five percent in the last two months, and will likely drop even further in the coming months.

Analysts believe that as homes remain unsold on the market for an extended period of time, more homeowners will follow suit. As such, demand for residential real estate properties will continue its descent.

The supply of unsold homes available in Australia has jumped thirty percent in the last year alone. Prices have already dropped by five percent from where they were last year, and they are anticipated to drop even further in the coming months. In general, when homeowners see housing prices start to collapse, they tend to list their home for sale as well. Such a reaction generally causes prices to drop even further, as it builds upon the already bloated housing supply.

Analysts are comparing the current situation in Australia with that of the United States just prior to the major crash that, to this day, continues to affect the nation’s economy.

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About Nancy Raven

Nancy is the main writer for the International section of the website. Sometimes she also helps Drew out on the Finance/Mortgage section as well.

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