With Australia’s market acting as a historical lead indicator due to its sensitivity to global economic shifts, the cooling Australian market amidst increased interest rates suggests a possible parallel trend for the U.S., where similar economic challenges are emerging.
As an independent Silicon Valley, California based real estate broker who owners the #1 online news source for Luxury real estate and Underground art, I have access to a huge curation of local, national, and international real estate news. Currently, what’s trending on Google in real estate world is the rising interest rates in Australia. This has led to an increase in searches for terms like “mortgage cliff”, “house for sale”, and “RBA”.
The concerns in the Australian real estate market can be both a hindsight and foresight for the US real estate market.
HINDSIGHT
The Australian real estate market is often seen as a leading indicator for the US real estate market. This is because Australia is a smaller, more open economy, and it is more sensitive to changes in global economic conditions. For example, the Australian housing market experienced a sharp downturn in 2008, ahead of the global financial crisis. Similarly, the Australian housing market has been cooling down in recent months, as the US central bank has raised interest rates.
FORESIGHT
The concerns in the Australian real estate market can also be seen as a warning sign for the US real estate market. The US housing market is currently facing a number of challenges, including rising interest rates, a shortage of affordable housing, and high inflation. These challenges could lead to a slowdown in the US housing market in the coming months or years.
Overall, the concerns in the Australian real estate market are both a hindsight and foresight for the US real estate market. Investors and homeowners in the US should monitor the Australian housing market closely for any signs of trouble.
Here are some specific trends in the Australian real estate market that could impact the US real estate market:
RISING INTEREST RATES:
The Reserve Bank of Australia (RBA) has raised interest rates several times in recent months in an effort to combat inflation. This has made it more expensive to borrow money, which could dampen demand for housing in Australia.
SLOWING PRICE GROWTH:
Home prices in Australia have been rising rapidly in recent years, but price growth has slowed in recent months. This could be a sign that the Australian housing market is cooling down.
TIGHTENING LENDING STANDARDS:
Australian banks have tightened lending standards in recent months in response to the RBA’s interest rate hikes. This could make it more difficult for people to qualify for a mortgage.
INCREASING SUPPLY:
The supply of new housing in Australia is increasing, which could put downward pressure on prices.
These trends in the Australian real estate market could have a number of implications for the US real estate market. For example, if rising interest rates and tighter lending standards lead to a slowdown in the Australian housing market, this could put downward pressure on home prices in the US. Additionally, if the supply of new housing in Australia increases, this could lead to an increase in the supply of Australian homes on the international market, which could also put downward pressure on home prices in the US.
Overall, investors and homeowners in the US should monitor the Australian housing market closely for any signs of trouble.
ABOUT ANNA D. SMITH FINE ART AND REAL ESTATE BROKER:
Anna D. Smith Fine Art and Real Estate Broker, located in Silicon Valley, operates under the trademarked motto “Fine Art needs a Home and a Home needs Fine Art®.” It is a prominent art advisory and brokerage entity specializing in contemporary Underground art. Additionally, the firm offers real estate services related to buying and selling commercial or residential properties in Silicon Valley. As the publisher of the 2023 Underground Art Market Report, Anna D. Smith has built a reputation as the “Queen of the Underground Art World” and has developed the firm into a renowned art and real estate brokerage known for its expertise, professionalism, and dedication to client satisfaction. Her website also features a blog where she shares her insights into the worlds of Real Estate and Underground contemporary art, covering topics like luxury real estate, the art market, NFTs, and more. Furthermore, she has curated art exhibitions and sells over 200 prints or originals of California prison artist Donald “C-Note” Hooker’s rare Fine Art.
