More warnings about the Australian housing market

From wsws.org. Australian house prices have continued their unprecedented ascent, with median home values in Sydney this week hitting a record $1.15 million and in Melbourne, $826,000, after rising by 13.1 percent and 7.6 percent respectively in the first three months of the year. The frenzied growth of the east coast market has prompted a … Continue reading “More warnings about the Australian housing market”

Negative gearing exposing Australia’s poor: KPMG

From Financial Standard. KPMG warns any increase in Australia’s historically low interest rates would cause serious economic problems and affect households across the entire financial spectrum, from rich to poor. The industry consultant said one of its biggest concerns is that Australian households have progressively increased debt levels at rates faster than their disposable incomes … Continue reading “Negative gearing exposing Australia’s poor: KPMG”

‘This thing’s gonna blow’: Top economists’ interest rate warning

From The Sydney Morning Herald. Deloitte Access Economics’ quarterly business outlook, released today, predicts the official cash rate of 1.5 per cent will climb slowly in 2018 and 2019 to reach 3 per cent in the early 2020s. The Reserve Bank was well aware “interest rates are now a massively more potent weapon for slowing … Continue reading “‘This thing’s gonna blow’: Top economists’ interest rate warning”

Tracing The Rise Of Mortgage Stress

We updated our mortgage stress models recently, which showed that around 669,000 households are in stress, which represents 21.8% of borrowing households.  Those results are a point in time view of households finances. The RBA also said that one third of households have no mortgage buffer. Today we take a longer term view of the … Continue reading “Tracing The Rise Of Mortgage Stress”

One In Three Households Have No Mortgage Buffer – RBA

The latest Financial Stability Review from the RBA has a different tone to it, compared with previous edition, because whereas they have previously played up the “cushion” some households have by paying their mortgages ahead, now they say one third of households have no buffer and are exposed to potential interest rate rises. What has … Continue reading “One In Three Households Have No Mortgage Buffer – RBA”

Getting To Grips With Mortgage Stress

We recently released the latest data on mortgage stress.  We said “of the 3.1 million mortgaged households, latest results from the DFA surveys of 52,000 households reveals an estimated 669,000 are now experiencing mortgage stress. This is a 1.5% rise from the previous month and maintains the trends we have observed in the past 12 … Continue reading “Getting To Grips With Mortgage Stress”

Malcolm Turnbull backs RBA warning as household debt hits new record

The Australian Financial Review covered the latest DFA mortgage stress research today, even if they managed to scramble the data in the chart I provided. Here is the correct data. This is what the AFR wrote: Household debt is rocketing towards 190 per cent of disposable incomes, ramping up pressure on the Reserve Bank of … Continue reading “Malcolm Turnbull backs RBA warning as household debt hits new record”

APRA’s housing intervention could suck billions out of the consumer economy

From Business Insider. Despite the impression you might get from policy wrangling like we’ve seen in recent weeks over corporate tax rates, or complex arguments about the levels of growth that other policy adjustments can deliver, or the daily updates you’ll see on commodity prices, at the heart of the Australian economy there is one … Continue reading “APRA’s housing intervention could suck billions out of the consumer economy”

Think The Unthinkable – The Property Crash We Have To Have?

In past years we have been highlighting the misaligned policy settings which have allowed home prices to balloon, household debt to soar, interest rates to slide and investors to gain more than a third of the market, higher than UK or USA. As banks have continued to lend and inflate their balance sheets and bolster … Continue reading “Think The Unthinkable – The Property Crash We Have To Have?”