Australian housing


PHOTO: Australian housing

While the decline in property prices has been orderly thus far, things could get rough from here, says Charlie Jamieson, Chief Investment Officer at Jamieson Coote Bonds. The missing ingredient to date has been forced selling. Jamieson says that it’s forced selling that can “expediates the entire cycle”, leading to a “death spiral” of falling prices driving more forced selling. But the biggest problem remains a lack of credit availability as banks have switched from a focus on loan growth, to a focus on loan quality. “Whenever a bubble bursts, it’s generally the withdrawal of cheap or easy money that sucks the oxygen out… In many respects, we’re going through that at the moment.”