House prices hit a debt ceiling

With no capacity left for debt to take a larger slice of the family income pie, it's inevitable Australia's housing market will continue to wane.

Mortgage debt is by far the largest component of debt in Australia today – government debt, which is the focus of political debate, is trivial by comparison. A quick caveat though – finance sector debt may be larger again than mortgage debt, if a claim sourced from Morgan Stanley, which shows Australia’s aggregate private debt ratio as almost equal to that in the US, is accurate.

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