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Australia’s 55-Year Housing Boom is ‘Officially Over’

One of the world’s greatest-ever real estate booms is ‘officially over’.

Analysts at Swiss banking giant UBS have called a top to the Australian housing market, signalling the end of 55 years of growth during which home values soared by more than 6500%.

“There is now a persistent and sharp slowdown unfolding,” UBS economists led by George Tharenou said in a report cited by Bloomberg. “This suggests a tightening of financial conditions is unfolding, which we expect to weigh on consumption growth via a fading household-wealth effect.”

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Or, in plain English, the bank expects Australians to spend less because they can no longer count on their home values rising. That’s going to come as a shock in a country where prices have risen over 8% a year on average, and doubled every nine years, according to Bank for International Settlements data cited by The Australian.

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The boom, driven by 25 years of ever-rising demand from China for Australian raw materials like coal and iron ore, was so severe that Sydney edged past London and New York to become the second-most expensive housing market in the world, after Hong Kong.

House prices in Australia are still rising in year-on-year terms, but the growth rate has slowed to 7% in October, from 10% as recently as July, according to data released Wednesday by CoreLogic. They were broadly unchanged in month-on-month terms in October.