Test awaits in 2023 as inflation-fighting rate hikes put focus on mortgage servicingA coastal Sydney suburb. Australia’s AU$9.4 trillion housing stock is worth more than four times the size of its gross domestic product. © ReutersPRASHANT MEHRA, Contributing writerDecember 12, 2022 11:32 JSTSYDNEY — Australia’s pivotal housing sector is turning into a double-edged sword for its central bank, which has repeatedly talked about a narrow path toward achieving a “soft landing” for the economy in its battle against inflation.A key to that goal is how households, which hold nearly 2 trillion Australian dollars ($1.35 trillion) of housing debt, respond to a succession of interest rate hikes — the latest coming last week. Most economists expect the nation will avoid a recession, but those hopes could be dashed if home prices plummet by more than the expected 20% from their peak earlier this year.
This article was originally published by Asia Nikkei.