Price Correction: Why, How Much, And How Long?

ljgrealestate

Overall, Australia had its first annual real estate price decline since 2012. How far will it go?

First, why did this happen? There are multiple factors which worked together to cause the fall.

It has been argued that property prices, especially in the larger cities, have been in a “bubble” for some time.

Supply and demand are certainly a primary cause, but not the only one. Overconfidence and over-speculation in the market can have some effect.

Another factor has been money laundering by organized crime. Criminal money from China — and other countries too — has contributed to higher prices because money launderers are willing to pay more. And once a property sells for a high price, it tends to raise prices for other neighborhood properties. But while that is surely a contributor, it is not clear just how much.

In any case, we know prices have risen. So what…

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