House prices in Australia could plunge, says Reserve Bank research

Household debt levels have increased considerably over the past 30 years, both in Australia and elsewhere.

Contrast of old and new buildings in Sydney city center, Sydney, New South Wales, Australia. Source: AAP Image/Sergi Reboredo/Sipa USA

In Australia and other countries with relatively high household indebtedness, this is consistently cited as a key risk to financial and macroeconomic stability. Concerns about the risks posed by household debt appear regularly in the press, and in reports from financial analysts and global institutions. 

These concerns have been heightened by the deep global contraction induced by COVID-19. Households across the world are experiencing a significant drop in income, and the extent of the risk posed by the current levels of household debt will become more apparent. 

Press Play on the main photo and listen the podcast