SYDNEY, March 3 (Xinhua) -- Despite Australia having 25 years of continuous growth and the housing market being among the most lucrative in the world, the Organisation for Economic Co-operation and Development (OECD) released a report Friday, warning of the potential hazards that may face the property sector.
At the moment, things are extremely positive for investors in the housing market, and in Sydney the sector grew 18.4 percent over the past year and in Melbourne the market moved 13.1 percent.
However, Australia's record all time high debt to GDP ratio reached 123 percent, which is the third highest in the world.
This ratio means any downturn in the economy might see Australia at high risk.
For example, if the unemployment rate were to drop through weakness in Australia's biggest cash cow, the mining sector, it would "result in a significant fall in consumption, rising mortgage stress and falling house prices," the report says.
The OECD believes if this were to happen, the housing market would be very vulnerable to a mass exodus of investors.
"The market may not ease gently, but develop into a rout on prices and demand with significant macro-economic implications," the report said.
"A continued rise of the market, fuelled by both investor and owner-occupier demand, may end in a significant downward correction that spreads to the rest of the economy."
