Home prices (Real Estate) for Australia slip down for three consecutive months. Furthermore, the condition of Sydney even worsens as the city suffers the worst decline in the past 40 years. Increasing borrowing costs and spiked inflation are deteriorating the economic health of the country. Consequently, citizens are now experiencing difficulty in meeting up their valuable expenses.
If we look into the figures for Sydney, then weakness is observed thereby making a dip by 2.2 percent in the month of July. Moreover, Melbourne also lost 1.5 percent. The continuous downfall in property prices may symbolize the biggest financial crash after 2008. However, the fall is marked for only three successive months, we may witness the biggest crash in property prices in the days ahead.
Inflation is at its peak and rising interest rates may hit the real estate market adversely. We all remember the year 2008. The Lehman Brothers filed for bankruptcy in the year 2008 and got disappeared from the investing landscape.
Lehman Brothers: from a giant investing company to a sinking ship
Lehman Brothers got incorporated in the year 1850 and became a key commodity trading company. Furthermore. the company deals with cotton trading earlier but later on in the year 1906 the company shifted its interest from trading to investment banking.
In mid-2000, the Lehman Brothers intensely invested in mortgage-backed securities, and by the year 2007, the Lehman brothers became the largest holder of mortgage-backed securities. Therefore, an unrealistic hike in property prices builds an aura of a booming market. But when the market crashed, it took away the Lehman Brothers slowly and steadily.
Initially, there were growing numbers of defaulters, and later on, the investment company could not survive for a longer time and filed for bankruptcy for $619 billion, the biggest debt in the history of the US.
China has also reported the sales volume and new home prices down for an earlier month. The property market in China is dropping down due to rising inflation. People are now meeting their necessary expenses thereby reducing the amount of luxurious living. Furthermore, the citizens are no more brand loyal. However, they are purchasing cheaper goods rather than purchasing their key branded products.
In the current scenario, big players have invested their money in the real estate market thereby booming the sector for so long.
But now the property prices are at their peak and we are expecting a major crash in the real estate sector.
The real estate market is directly linked with the base metal. If the sales volume and the new home prices drop down, then we may see a downside panic in the prices of base metals.
Inflation is hitting hard globally thereby deteriorating the health of the whole economy.
Technical Analysis on Copper
Copper is in its resistance zone from $3.70 to $3.90. Traders may sell around $3.70 thereby maintaining a stop loss of $3.90. Furthermore, we may experience a downside target between $3.40 to $3.20.
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