Property slump - Australia
Real estate: Australia's property market is riskier
than Canada's, here's why
Australia and Canada have a lot in common when it
comes to property — both nations have record housing debt and have had surging
prices in two of their key cities.
But there are some key differences in housing policy
and financial practices that may make Australia more vulnerable to a housing
crash.
These differences have been highlighted by the chief
executive of Canada Mortgage and Housing Corporation (CMHC), Evan Siddall, who
was the keynote speaker at a recent conference hosted by the Australian Housing
and Urban Research Institute (AHURI).
In an exclusive interview with the ABC, Mr Siddall
touched on four reasons why Australia might be more vulnerable to a severe
housing downturn than Canada, as well as one key area where both countries are
taking a similar approach — foreign investors.
Australians have more debt than Canadians
Canadian households have a lot of debt, in fact their
debt is slightly bigger than the annual output of the nation's entire economy,
101 per cent of GDP.
That debt level is twice as big as it was at the start
of the 1990s.
Australians 'vulnerable' to rate shock, Canadians less
so
Canada insures its banks' risky loans — and charges
for it
Canada has a national housing agency, Australia
doesn't
(Source: Australian Broadcasting Corporation )
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