Unfortunately, the problem with the (ahem) experience of recession in Australia, is that it failed to readjust expectations in the real estate market. On the face of things, it seems that most of our job losses were limited to those in Generation Y (who are either just entering the workforce, or working part time during tertiary study), and the lesser skilled members of Generation X.

By comparison, the economic bull markets of the 90’s and 00’s perfectly positioned baby boomers to capitalise on cheap credit to purchase investment homes, and often, heavily leverage these investments. This heavy leveraging has pushed most other western economies into real estate (and financial) collapse.

However, when Australian baby boomers didn’t lose their jobs during the recession, their investment homes weren’t sold and the supply of available housing remained relatively stable (an effect encouraged by decreasing interest rates and high levels of real estate stamp duty).

Australia remains one of the most expensive countries in which to buy a home. I believe that we escaped only through a quirk of circumstance – and even then, only temporarily. In fact, I’ll call it now, Australia will have a second housing recession in the next 10 years – brought on by the retirement and inflated expectations of baby boomers.