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Australia's property market is cooling down

Bloomberg Published on Fri, Aug 04, 2017 / 3:29 PM GMT+8

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(August 4): One of the key engines of Australia’s five-year housing boom is losing steam.

Property investors, who have helped stoke soaring home prices in Australia, are being squeezed as regulators impose restrictions to rein in lending. The nation’s biggest banks have this year raised minimum deposits, tightened eligibility requirements and increased rates on interest-only mortgages -- a form of financing favoured by people buying homes to rent out or hold as an investment.

Australia’s generous tax breaks for landlords, combined with record-low borrowing costs, have made the nation home to more than 2 million property investors. Demand from those buyers has contributed to a bull run that has catapulted Sydney and Melbourne into the ranks of the world’s priciest property markets. Now, signs are emerging that the curbs are starting to deter speculators -- and home prices are finally starting to cool.