The end of the interest-only housing boom?

One of the hallmarks of the post-financial crisis housing boom in Australia has been the rise and rise of interest-only mortgages. In December 2009 they comprised 31% of authorised deposit-taking institutions' (ADIs) loan books, before growing to a peak of 40% in September 2015. That's an expansion of 29% in just under six years from what some might consider an already high base.

By June 2015, interest-only originations as a share of total new housing lending had reached 46%. To put that into some kind of perspective, the interest-only origination ratio in the United States peaked at just 29% in 2005. Not all else is equal between the pre-crisis US housing market and Australia's today so it's not a fair comparison (the US, for in …

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About the author

Dr Justin Pyvis is the Founder and Chief Economist at Pixelics. Justin is a published academic who has previously worked at AECOM, a global consultancy on the Fortune 500 and more recently with Asianomics Group, an economic, corporate and technical analysis research company based in Hong Kong.