A little pain can be a good thing

There are two things that impact Australian residential real estate prices the most. They are government policy and bank lending standards. Demand and supply are no doubt the ultimate drivers on price, that’s not disputed. But if we take the logic further and look at what drives demand and supply, we usually always come back to the actions of the various government departments in managing supply and the actions of bank regulators in managing demand.

The two forces are effective in managing real estate price growth in Australia because we are also a relatively small market. The big four banks still control a vast majority of residential