Moodys warns of Australian Property Bubble

It’s a familiar story to those in the USA & Europe but it seems the Australian property market has got a lot of the characteristics of the credit fueled calamity that befell the economies of the USA, UK, Ireland and much of the EU.

House prices in Australia have risen sharply, fueled by record-low interest rates and growing interest in Australian property from offshore investors, including those from China.

“The housing market appears to be increasingly likely to get caught up in a positive price-feedback loop and eventually could face a correction,” Moody’s said in its understated report this morning.

Moody’s reaffirmed Australia’s AAA rating but we all know what’s going to happen next.

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