In an eerie echo of statements made before the collapse of American housing bubbles in 2006, leading Australian bankers claim that Australia is not suffering a housing bubble. Yet prices are unsustainably high and a collapse is inevitable, though when it will happen may be unpredictable.
Median home prices in Sydney are AU$795,000 (US$606,000). More Sydney suburbs have median prices over AU$2 million than under AU$600,000.
America’s 2008 financial crisis didn’t lead Australian housing prices to fall. In fact, prices in Sydney have grown 106 percent and in Melbourne 88 percent since then. Ominously, however, prices in Melbourne, which are nearly as great as in Sydney, are falling for the first time in four years.
