According to many experts, NO.  The subprime market in the U.S. is what we refer to as non-conforming lending in Australia.  It provides finance for those with a marked credit history.  While Australia shares many similarities with the US in terms of our economy and lending practices our non-conforming markets are very different.

The Chicago Tribune posted an article on their webpage 18th March called "Subprime lending worries hit home".  This article states that 16% of all U.S. mortgage originations were subprime loans.  In Illinois the foreclosure rate for subprime loans is currently 6.22%.  Nowhere in Australia could you find a foreclosure rate that high.  Foreclosure rates for non-conforming loans are still less than 1% and non-conforming loans only make up about 5% of all borrowings.

There are many factors that have contributed to the subprime crisis including a slumping real estate market, aggressive product offerings from competitive subprime lenders and unemployment.  Carlos Castilo an analyst with CommSec says "the biggest driver of default is unemployment and unemployment in Australia is at near-record low levels."Also the lending criteria in the U.S. is remarkably different from Australia.  In the U.S. it was not uncommon for subprime lenders to offer loans to 100% of the value of a clients property.  Figures from Standard & Poor's show Australia's average debt ratio as 63%.  This difference in lending practices means that if Australian non-conforming customers fell upon hard times and faced foreclosure the lenders will not be affected and will be able to recover their losses through the customer's equity.