The International Monetary Fund says Australia has one of the greatest risks of mortgage defaults in the world, as it warns of a significant downturn in global economic growth for the year ahead.
abc.net.au/news/imf-global-economic-outlook-downturn-australia-housing-market/102211826The level of risk in Australia's housing market is the second-highest in the developed world, the International Monetary Fund has warned.The IMF has downgraded its global economic growth outlook to 2.8 per cent this year, stoking fears of an economic downturn
Using a range of risk indicators, the IMF says Australian households with mortgages are at greater risk of defaulting on mortgage repayments due to higher levels of household debt, rising interest rates contributing to higher mortgage rates, and elevated house prices. The table has five columns and a sixth column that provides the total score. The five risk indicators are:Share of debt outstanding at variable interest rateCumulative policy rate changes
"In the second quarter of 2022, however, quarterly real house prices fell, with about two-thirds of economies experiencing negative growth and the remainder positive but slower growth. The IMF said in economies in which house prices increased rapidly and affordability declined during the pandemic, but household debt levels remained "moderate" up to the recent onset of monetary tightening, a more gradual decline in property prices was expected, and that could improve housing affordability in those countries.
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