Mortgage default in Australia: nature, causes and social and economic impacts

Abstract

The Australian housing system has undergone major structural change in the past 20 years. Continuing population growth, falling average household size, strong economic growth and rising average incomes have underpinned buoyant demand for housing focused on metropolitan areas, smaller provincial cities, natural resource centres and tourist regions. Increasing income and wealth inequalities have changed patterns of access to housing by location, tenure and quality. The growth in two-income households has also impacted negatively on the access and affordability of housing for single lower income households. At the institutional level, deregulation of Australia's financial system, starting in the late 1970s, gathering pace in the 1980s and culminating in the 1990s with the explosive growth of the secondary mortgage market, has resulted in a quantum leap in mortgage debt and helped drive a pronounced housing boom in the 1996 to 2007 period (Berry & Dalton 2004; Berry forthcoming).