Australia has the second highest mortgage debt in the OECD


Australia has the second largest mortgage debt as a percentage of GDP among OECD countries, according to a new report.

OECD research showed Australia had the second largest mortgage debt in 2020, just over 90 percent of GDP, behind Switzerland’s total, which accounts for almost 120 percent of GDP.

In terms of mortgage burden, expressed as a percentage of disposable income, Australia comes third, at 20.3 percent, behind France (22.3 percent) and Luxembourg (24 percent). ).

Australian prices also rose at the fourth highest rate in the OECD, from 2000 to 2017, with New Zealand registering the fastest increase.

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

But Australia’s housing boom has been somewhat consistent, with house price volatility from 1990 to 2019 reaching 6.77, lower than the OECD average of 7.61.

“Housing prices in Australia have indeed continued to rise steadily in recent years, in response to strong population growth which has boosted housing demand and has not been sufficiently met by the supply of new housing.” notes the report.

“Restrictive land use governance criteria that depend on too many categories and excessive requirements on permitted activities have played a role in limiting the supply of housing. “

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

Investment in housing is also high in Australia, compared to its OECD peers.

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

There are four priority areas outlined in his new report: unlocking additional supply, land use reforms (such as removing overly strict building restrictions), greater flexibility in regulations versus regulations owner-tenants and the application of environmental standards.

[Related: House price rise jeopardises economy]

Australia has the second highest mortgage debt in the OECD

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Last updated: June 17, 2021

Posted: June 18, 2021

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Sarah simpkins

Sarah simpkins

Sarah Simpkins is the managing editor of Mortgage Business and The Adviser.

Previously she reported on banking, financial services and wealth for InvestorDaily and ifa.

You can contact her on This e-mail address is protected from spam. You need JavaScript enabled to view it..


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