“It’s a bit nerve-racking,” said Chris Jabbour, a young real estate agent who welcomed people through the door before the auction. “You don’t really know what’ll happen next.”
So far, the economic damage has been minimal. Mortgage delinquency rates were largely stable last year, according to S & P Global, a ratings firm, though they are expected to rise this year. Moody Analytics, a financial intelligence firm, forecasts that home prices will resume rising by year’s end.
Still, signs of stress are showing. Mr. North, the analyst from Digital Financial Analytics, estimates that of 3.5 million mortgages where the owner lives in the home, almost a third of the households have incomes close to or less than their expenditures. He predicts that at least 50,000 homeowners may default in the next 12 months.
The long run-up in housing prices mirrors Australia’s boomtime economy, which has not seen a recession in more than a quarter-century. Demographics helped Sydney and Melbourne in particular, as the cities attracted both Australians and immigrants.
The run-up has put local home buyers under pressure. After Switzerland, Australia has the highest ratio of household debt to economic output among a group of nations that includes the United States, Europe, China and other Asian countries, according to the Bank for International Settlements, an organization that links up central banks. About one-quarter of Australian households have less than one month’s extra put aside in savings to make the next mortgage payment, the country’s central bank said in February.
Domain, an Australian real estate website, found in June that the average Sydney couple would take nearly nine years to save for a 20 percent deposit on an entry-level home near the city’s central districts.
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Source : https://www.nytimes.com/2018/07/17/world/australia/sydney-melbourne-housing-costs.html