OECD: Soft Landing Most Likely Outcome

Posted on 17/12/2018  
OECD: Soft Landing Most Likely Outcome

The Organisation for Economic Co-operation and Development says Australia’s long span of economic growth, 27 consecutive years, is likely to continue - and that the Sydney and Melbourne housing markets are “on track for a soft landing”.

In its latest Australian economic survey, the OECD says: "Life is good, with high levels of well-being, including health, and education. Robust economic growth is set to continue."

"New capacity coming on stream in the resource sector will support exports and business investment will pick up.

"Growth of wages and prices will rise gradually, while the unemployment rate will edge lower.

"Output growth will moderate slightly in 2020 as capacity constraints tighten, export-market growth slows and households become less willing to draw down savings to fuel consumption.

It says the most likely outcome for the housing market in the biggest cities is a soft landing and that a housing crash is unlikely. But it says the housing market could pose a risk to the nation's economic growth going forward.

"Financial supervisors and bank regulators should be prepared in the event of a hard landing in the housing market," the report says. "High indebtedness of households remains a risk.”

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