The Australian mortgage-backed securities market is young but growing almost daily, as Aussie MBS professionals expect their biggest issuance year in history in 2001 in a country that has only 22% of its mortgage market securitized.

While some may consider Australia a backwater in securitized finance, the country is fast becoming one of the linchpins of a broader international MBS market. Analysts at Morgan Stanley Dean Witter expect A$25 billion ($13.8 billion) in MBS issuance this year, up from roughly A$20 billion ($11.1 billion) in 2000. The growth pattern has been steady. From September 1999 to August 2000, roughly $40 billion worth of Australian mortgages were originated on 546,000 individual loans, and analysts expect the market will post an annual rate of $40 billion in new issuance in the next few years.

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