An idea of just how big this has become in Australia and why it’s so potentially dangerous.I’ll go back to sharing screens again. I want to show you this chart here. This is your level of mortgage debt compared to GDP in Australia and America. And you can see you go back to, we had about % of GDP as a mortgage debt level, they had about %.We reached equality in roughly in. When.
the prices hit, they started to slow down and then fall. They peaked at about % of GDP as a mortgage debt level and we were about the probably % mark. Now, America’s mortgage debt is about -% of its GDP and ours is%+. So that much additional debt’s been added to maintain the house price rise in Australia.Now, I’ve got to muck around with quite a few charts. This is work that I’m doing for a book so I haven’t quite put it all together properly yet, but here’s the chart that I want to show. This is looking at the – I’ve shown you the acceleration of.
mortgage debt in America and house price www.brisbanepropertyvaluations.com.au change relationship there. Now, people can say Australia is different.Well, no, it’s not. This is the Australian data. And it’s not quite as strong as the Americans in terms of the link, but you can see mortgage acceleration is driving house-price change. From, which is when this new bubble took off, right up to now, acceleration has been getting higher and higher.
So the red line is mortgage acceleration. That’sbeen what’s driven house prices up since. Now, at some point, and I think it’s happenings right now, that acceleration is going to start slowing down and that’s when the house prices start falling. So we’re seeing that turning up on the Australian data right now.