 Big amount of debt in recent years
If interest rates and joblessness continue to rise, Australians are faced with greater financial shock, says report from Standard & Poor.
''We believe the larger debts and higher leverage expose some Australian mortgage holders, especially those with less equity in their houses, to potentially greater financial shock if high unemployment and interest rates, alongside a collapse of residential property values, were to occur,'' said Standard & Poor's credit analyst Vera Chaplin.
To finance the purchase of homes Australians have recoded big amount of debt in recent years. Cost of home also soared by 20% in March, according to the Australian Bureau of Statistic.
This April, total Australian mortgage debt for owner-occupied housing totals $774 billion, while debt for investment purchases reaches $330 billion, according to the Reserve Bank.
According to experts the greater financial risks occur not due to the amount of debt but the capacity of families to service the home debt repayments.
Nevertheless, Australia has left behind other developed nations by having stronger growth and lower unemployment rate during the global financial crunch.
Despite the high debt levels, Standard & Poor's said the housing market's robust fundamentals would ''continue to support the housing market''.
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