“Outside Hong Kong and Shanghai, Australia is the most expensive real estate market in the world compared to income.”-Harry S. Dent Jr, economist

The housing market bubble is finally bursting in Australia, it’s being called an “economic tsunami” in Australian media.

One of the biggest Australian banks, Commonwealth Bank, has dropped its interest rates to try and get people to buy homes.

Also, most of the major home finance banks in Australia are offering refinancing loans to help keep people form defaulting on their home loans.  It’s very much like whats been going on here in the United States.

Home prices in the state of South Australia (SA) have been slashed by thousands of Australian dollars.  One woman cut her asking price by $60,000: “It’s been on the market for nine months now and the way the economy is at the moment it wasn’t even getting a look-in at open. My partner and I came to the conclusion we needed to drop the price.”-Jan Grainger, Fullarton

This weekend, U.S. economist Harry S. Dent Jr stated that the housing bubble in Australia was about to burst, as well as in China and Japan. He also indicated that the housing correction in the U.S. isn’t over: “People in places like Sydney or Tokyo or Miami say, ‘Hey, real estate can never go down here, we’re a great place, everyone wants to move here, there’s not much land for development’, and what I say is that is exactly the kind of place that bubbles.”

Dent said Australia’s house prices need to correct to 1990s levels.

In the Australian state of Victoria (VIC) real estate agents are actually dropping clients who refuse to drop their prices: “An agent only gets paid when they sell a property so if they are investing a lot of time into something they know is not going to sell, then there is no point in wasting time on it.”-Catherine Cashmore, real estate agent

In New South Wales (NSW) the state government announced that a new tax, on existing home sales to first time home buyers, would go into effect after January 1.  That is causing sales to hit 60% rate, due to people trying to beat the new tax (stamp duty).

The problem is that after January 1 you can expect home sales in NSW to hit the floor: “The stamp duty will be a hit of $15,000 – that’s a lot of money for anyone these days. People who haven’t bought or can’t buy by this time have no choice to go back on the rental market. People that don’t buy before January will see rent increase.”-Joel Hollis, real estate agent