The Deadly Embrace Of Housing

The latest RBA Chart pack, out today, with data to early February 2017 really highlights the critical role housing plays in household finances. If the home price growth music were to stop, things would get tricky.

Overall net wealth continues to lift, supported by rising dwelling prices, (and fully priced financial assets).

Everyone seems to benefit from high home prices.

Investment loan flow is now as large as owner occupied flow, as investors continue to bet on housing for future growth, in a low interest rate environment.

House prices continue to rise following slower growth earlier in the year.

Household debt continues to grow, whilst ultra-low interest rates make interest repayments manageable – though of course there are mortgage rate rises in the works.

 

Author: Martin North

Martin North is the Principal of Digital Finance Analytics

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