There you have it -- the banks opened up the credit floodgates 5 years ago, precipitating the boom, and now it's come full circle -- massive levels of foreclosure, housing inflation, indebtedness, borrowing and consumer risk, so they turn tail and restrict credit again. Of course, 'the gummint is managing the economy'. At least APRA could have done something, but they did very little -- it took an international credit squeeze to stop the local largesse.
This could bring down house prices, because
1) people can borrow less, thus reducing bid prices
2) they will probably also have to pay more interest, also reducing how much they are prepared to pay for housing.
Credit squeeze hits Aussie banks
