The Reserve Bank of Australia (RBA) has warned that Australia is not immune to a sudden collapse of the global artificial‑intelligence investment boom, citing mounting threats to global financial stability in its latest biannual review. The central bank said high valuations in corporate debt and share markets make them vulnerable to a disorderly correction, and that a shift in sentiment toward the AI boom could trigger such a shock.
Despite a deepening property price slump concentrated in Sydney and Melbourne, the RBA found that fewer than one in 100 borrowers owe more on their home than it is worth. Most indebted homeowners are coping with higher borrowing costs, and the share of mortgagors in severe financial stress or arrears remains low, supported by a strong labour market and savings buffers.
The RBA noted that recent buyers who took out large loans close to the value of the property, including first‑home buyers who used the government’s 5 % home guarantee scheme, are at greater risk. However, evidence suggests that the share of these borrowers falling behind on payments remains contained, and even a 20 % property price crash would push only about 5 % of mortgages into negative equity.
The review also highlighted external risks such as ongoing conflicts in the Middle East and Ukraine, intensifying strategic competition among major powers, rising cyber‑attack risk potentially facilitated by AI, and a sudden sell‑off in global bond markets. These factors were identified as the most prominent threats to financial stability in Australia.
