New Zealand, Canada property slumps offer glimpse of Australia's future

New Zealand and Canada have already navigated severe property market downturns, offering a potential preview for Australia as its own housing market begins to slide. Both nations aggressively hiked interest rates, driving their economies and real estate sectors into sharp declines.

New Zealand's property market surged dramatically after the global financial crisis, rising 164 percent by early 2022. However, the country's central bank was among the first to raise interest rates post-Ukraine invasion, deliberately aiming to cool the economy. This, coupled with higher unemployment, led to an exodus of Kiwi workers seeking opportunities in Australia.

Canada also experienced a prolonged decline in its real estate market over the past four years, following significant interest rate hikes that far outpaced Australia's. Unlike New Zealand, Canada had previously imposed restrictions on immigration, including students, which contrasted with Australia's sustained high arrival levels post-pandemic. This immigration policy difference has contributed to housing shortages in Australia.

Australia's housing market, while historically resilient due to household reserves, is now facing a downturn. Buyers are retreating amid interest rate increases and a shift in tax policy that has reduced incentives for investors. While Perth, Brisbane, and Adelaide initially showed growth, this has now evaporated, mirroring the national trend.