I linked to this piece late yesterday, so just recapping some of the points made there ICYMI

Australia Housing Boom Peak Has Passed, Morgan Stanley Says

  • Housing industry facing a "more imminent credit crunch"
  • MS highlight "settlement risk on the 160,000 apartments we forecast being completed through the end of 2017" as the "greatest vulnerability"
  • MS forecast a national housing oversupply of about 100,000 dwellings by 2018 ... a glut of apartment projects ... particularly in Sydney and Melbourne.
  • "Listed developers report low failure rates currently, but also confirm credit availability has tightened, especially for foreign investors. Non-bank credit is moving to plug the gap at higher interest rates"
  • MS say the housing slowdown, combined with a decline in mining investment ... putting 200,000 jobs at risk and pushing the unemployment rate up to 6.5 percent
  • Will prompt the RBA to resume cutting interest rates in the second half of next year, lowering the benchmark rate 50 basis points

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On this: " a glut of apartment projects ... particularly in Sydney and Melbourne"

Sydney and Melbourne are where house prices have rocketed the most. If the oversupply weighs on prices (I expect it will) that's great news for those looking to buy.