Housing and mortgage markets in turbulent times: is Australia different?

This paper presents an account of recent housing and mortgage market developments in Australia viewed from a longer-term perspective. It is argued that Australian housing drivers and outcomes are, to some extent, unique, enabling the sector to withstand the fall-out from the global financial crisis to date. However, they have resulted in increasing problems of housing stress for lower-income and younger households who are finding it increasingly difficult to access homeownership and are facing significant affordability problems in the private rental market. The paper casts forward to the next 20 years, outlining both a 'positive' 'business-as-usual' scenario characterized by buoyant housing demand and strong national economy, and a 'negative' scenario marked by stalled economic growth and a sharp downward correction in housing prices. Under both scenarios, it is suggested that addressing the housing affordability gap will remain a major policy challenge