Australia should start planning for a house-price induced downward spiral, the Paris-based Organization for Economic Cooperation and Economic Development (OECD) warned on Monday.
Key points
- If house prices collapse consumer spending could suffer, via negative impact on wealth including from exposures to bank shares, which would encourage deleveraging.
- Together with reduced housing-related expenditures, this would put pressure on the whole economy.
- OECD believes the Australian property market will make a “soft landing.”
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