Australia will see the world's biggest house price declines this year, according to one of the world's major credit ratings agencies.
In a research report released on Wednesday, Fitch Ratings forecast Australian house prices would decline a further 5 per cent this year, on top of a 6.7 per cent decline from the peak so far, making Australian housing the worst performer out of 24 countries for the second consecutive year.
The decline, which was driven by lower investor demand as regulators imposed restrictions on interest only and investment lending, means Australia has now hit a household debt-to-GDP ratio of 121 per cent - a big risk to the nation's economy going forward.