There is a downturn observed on Australia’s east coast real estate market, Bloomberg reports.

House financing dropped in April by 1,4%. Such fall is shown for five straight months already. This is the longest strike since September 2008, when Lehman Brothers Inc. collapsed and a month before Bank of Australia reduced its interest rate by one percentage point.

The biggest slump is observed in Sydney, where prices fell as much as 4,2% in May compared with last year when growth was 17%.

The key factor that caused such market situation is tighter mortgage rules. Regulatory authorities made banks to reduce amount of riskier mortgage loans earlier. Decline in loans, under which only interest is paid during first year, made prices in Sydney unaffordable for many investors. The number of Chinese investors that drove the market up recently also decreased.

The perspective for Australian borrowers is not very optimistic, since wage growth is not observed during last five year. Private debt to income ratio in the economy is also at record high level of 189%.

Optimistic experts think that the market will be supported by Australian population growth and record low interest rates that stay at 1,5% last two years. Others think that current slump is just a beginning.