How Australian Banks Became the World’s Biggest Property Addicts

Australia is riding out a huge gamble on property. The bet: 27 years of recession-free economic growth—during which Sydney home prices surged fivefold—would continue unabated and allow borrowers to keep servicing their debt. The gamble has turned dicey. Tighter lending rules are deterring investors, and lofty prices are starting to deflate. A banking probe is…