8 elm condo floor plan.Can’t you stand the two biggest real estate speculation resorts in the world? The real estate market, which survived the collapse of the financial crisis, is unable to withstand high interest rates after all.Please Visit: 8 elm condo floor plan to Get Your VVIP Registration Today!
The collapse of the US housing market at the end of 2007 dragged the global economy into a deep recession, but the real estate markets in Australia and Canada did not plummet like the US market and became “role models” for global economies to learn from.
The myth did not play out in the global housing downturn, with house prices in both countries falling for months in a row.
During the financial crisis, Canada’s mortgage default rate did not rise sharply compared with its neighbor, the United States, and no Canadian bank needed a government bailout. The Economist called Canada “a country that did the right thing” (a country that got things right).
This can be attributed to a number of factors, but perhaps the most important is regulatory differences. Compared with the loosening of lending standards in the United States, Canada has prevented lenders from providing mortgages to people who cannot pay.
Canada’s subprime market is much smaller than the United States, with a subprime loan ratio of only about 5% in 2006, compared with 22% in the United States.
Higher lending standards have dampened demand for homes in Canada, where prices rose relatively little before the 2008 recession.
As can be seen from the chart below, although the monetary policies of the United States and Canada are very similar, house prices in the United States have risen much faster than in Canada, which rose almost twice as much between 2000 and 2006.
When the subprime crisis broke out, the delinquency rate in the United States soared, but by mid-2009, Canada’s delinquency rate showed little sign of increasing.
After a brief fall in house prices, house prices soon began to rise again as the Bank of Canada cut interest rates to cope with the recession.
However, after the Bank of Canada began to raise interest rates in March this year, the housing market could not hold up, causing both volume and price to fall.
According to the Canadian Real Estate Association (CREA), the average house price of Canadian real estate sales in October was $644, down 10% from a year earlier and more than 20% from a peak in February 2022, and home sales fell 36% in October from a year earlier.
Australia was also one of the countries that avoided a property crash in 2008. The chart below shows ABS’s established Australian housing price index, which recovered quickly after a slight decline in 2009.
Like Canada, Australian home loans are cautious. In mid-2007, Australia’s substandard home loan market (the subprime mortgage market closest to the United States) accounted for only about 1% of the mortgage market, significantly lower than about 13% in the United States.
Even during the financial crisis, Australia’s big four banks remained profitable and maintained their highest credit ratings.
In addition, Australia is the only developed country that avoided a technical recession during the financial crisis, with a good basic support for the housing market.
This is also thanks to China, then Australia’s second-largest export market, with GDP growth of more than 6 per cent and strong import demand that helped Australia weather the downturn.
But now Binzhou house prices have fallen for six months in a row, with Australian home values down 1.2% in October, Sydney, the highest, down 10.2% since its peak in January, and Melbourne, down 6.4% since February.