The real estate crisis that started in 2008 was unprecedented in Australian history.
It was also a real estate bubble that exploded in the middle of the financial crisis.
Real estate markets have now seen a steady rise in the price of homes in recent years, fuelled by a glut of new housing supply and strong demand from overseas investors.
But what happened?
The story of the real-estate crash and the housing bubble can be summed up in three words: bubbles.
The collapse of the global financial system was triggered by a failure to recognise the risks of excessive leverage, the collapse of asset prices, and the failure to prevent the bursting of the housing market.
The boom and bust cycle that followed the crash was exacerbated by the failure of governments to act on climate change and other global issues.
But the real tragedy of the crash has been that it has led to the continued high prices in Australia.
In the absence of a credible policy response, house prices in our country have risen at a rate of almost 50 per cent in the last four years.
The impact of this on Australians is devastating.
This has been the story of a very fragile bubble that was quickly bursting.
It has been accompanied by a massive build-up of debt that has been increasingly unaffordable, and a collapse in living standards and employment opportunities for millions of Australians.
We’ve also had an unprecedented surge in the use of debt to buy houses, as investors seek to protect themselves from rising property prices.
There is an understandable concern that, as the economy has recovered, house price growth will slow, and that households will need to take on additional debt to cover their mortgage payments.
While the Australian government has attempted to contain the debt boom by restricting the amount of money people can borrow, it has also had to impose draconian capital gains taxes, which effectively discourage housing investment.
We have also had a series of tax increases, particularly on people earning more than $150,000 a year.
These have helped the housing boom.
But the government has failed to do more to stop the bubble from expanding and the price increase will only get worse.
What’s the solution?
Australia is not unique in this crisis.
But our current housing bubble is unlike any other we’ve seen.
It’s driven by unsustainable levels of leverage.
As a result, it is difficult for investors to get access to cheap housing.
This is particularly important in a country like Australia where housing is already one of the fastest-growing sectors of the economy.
But if we want to avoid a repeat of the past, we need to tackle the causes of the bubble and the underlying issues that created it.
It’s also important to recognize that the housing crisis is not only a housing bubble, but also a systemic problem in Australia that will have a profound impact on our economy.
If we continue on this path, Australia will miss out on the most important global economic opportunity of our time: a global boom in growth, jobs and incomes.