Housing Markets and the Global Financial Crisis
Show Less

Housing Markets and the Global Financial Crisis

The Uneven Impact on Households

Edited by Ray Forrest and Ngai-Ming Yip

Housing markets are at the centre of the recent global financial turmoil. In this well-researched study, a multidisciplinary group of leading analysts explores the impact of the crisis within, and between, countries.
Buy Book in Print
Show Summary Details
You do not have access to this content

Chapter 8: The Impacts of the Global Financial Crisis on Housing and Mortgage Markets in Australia: A View from the Vulnerable

Mike Berry, Tony Dalton and Anitra Nelson


Mike Berry, Tony Dalton and Anitra Nelson INTRODUCTION By most accounts, the Australian economy and housing sector have been spared the worst effects of the global financial crisis (GFC) that broke out in the USA in 2008 and spread rapidly through most developed economies (IMF, 2009a). What has turned a seemingly localized default crisis in the US residential mortgage markets into ‘The Great Recession’ has been the combination of low interest rates in the wake of the dot.com boom and 9/11, and the increasing interlinkages and fragility of the financial systems in the USA, Europe and Japan. This meant that many more people than defaulting mortgagor households were negatively affected by the GFC. Economic contraction, rising unemployment and mortgage defaults have reinforced each other in a downward vicious circle. Failures in the banking and shadow banking sectors have spilled out into the real economy, most notably in the US automobile industry, resulting in unprecedented monetary interventions and fiscal stimulus policies by national governments, including those in the large emerging nations (for example China). Australia, almost alone among the developed economies, has not (yet) gone into ‘technical recession’. Although growth has slowed significantly, it was positive in 2009, unlike the forecast 3.9 per cent contraction for developed economies as a whole (IMF, 2009b). The ‘credit crunch’ that has hamstrung other economies has emanated from the pervasive insolvency threat hanging over commercial and shadow banking institutions, which saw their balance sheets shredded by accumulated investments in ‘toxic assets’, financial instruments backed by...

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information

or login to access all content.