Powered by MOMENTUM MEDIA
realestatebusiness logo

Subscribe to our newsletter

Australia has second-highest mortgage debt in OECD

Australia has the second-highest mortgage debt as a proportion of GDP among OECD nations, according to a new report.

The research from the OECD has shown that Australia had the second-highest mortgage debt in 2020, a little more than 90 per cent of GDP, trailing only Switzerland’s total of almost 120 per cent of GDP.

For mortgage cost burden, shown through percentage of disposable income, Australia came third, at 20.3 per cent, behind France (22.3 per cent) and Luxembourg (24 per cent).

Australian prices also rose at the fourth-highest rate across the OECD, from 2000 to 2017, with New Zealand seeing the fastest rise.

The nation was on the high end for house price to income ratio, where it had a figure of 16.27, in contrast to the OECD average of 10.42.

Advertisement
Advertisement

But Australia’s property boom has been somewhat consistent, with house price volatility from 1990 to 2019 scored 6.77 being more muted than the OECD average of 7.61.

“House prices in Australia have indeed continued to rise steadily in recent years, in response to strong population growth that boosted housing demand and was not adequately met by new housing supply,” the report noted.

“Restrictive land-use governance criteria that depend on too many categories and excessive prescription on allowable activities have played a role in limiting housing supply.”

Australia’s price-to-income ratios, however, are projected to keep rising, alongside New Zealand, Denmark, the UK, and Luxembourg and Sweden, where more substantial growth is expected.

Housing investment is also high in Australia, compared with its OECD peers.

The OECD has called for governments to address housing affordability issues, noting rising prices and “historically low levels” of public investment.

There are four priority areas outlined in its new report: unlocking additional supply, land-use reforms (such as abolishing overly tight building restrictions), greater flexibility in regulations over landlord-tenant regulations, and applying environmental standards.

[Related: House price rise jeopardises economy]

Australia has second-highest mortgage debt in OECD
Australia has second-highest mortgage debt in OECD
mortgagebusiness

Latest News

Home loan applications continue to decline, according to the latest Equifax data.  ...

The non-major bank has announced “significant” home loan growth over the financial year 2022, up more than $1 billion. ...

New Zealand’s central bank has committed to another cash hike in the face of surging inflation, tacking on an extra 50 basis points. ...

VIEW ALL

Join Australia's most informed brokers

Do you know which lenders are providing brokers and their customers with the best service?

Use this monthly data to make informed decisions about which lenders to use. Simply contribute to the survey and we'll send you the results directly to your inbox - completely free!

Do you think the new NSW property tax will help or hinder first home buyers?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.