PHOTO: A building lot for new home construction in a Sydney suburb. Australian home prices are at the end of a five-year boom, with national household debt above 120% of GDP © Reuters
Maggie Lu is one of thousands of borrowers experiencing a credit squeeze, which has abruptly ended Australia’s housing boom and could pose a risk to one of the world’s most successful economies. “I got pre-approval for a mortgage last year but couldn’t find a house we could afford before it lapsed,” said the mother of two, who wanted to move from her Sydney apartment into a house. “Prices are falling but now my bank will only agree a mortgage worth A$170,000 [US$120,000] less than the level agreed last year. So we are stuck.”
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