With $1 trillion of Australian mortgages the RBA might be getting worried

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http://www.brisbanetimes.com.au/business/the-economy/with-1-trillion-of-australian-mortgages-it-might-be-time-to-worry-20170207-gu7s29.html?google_editors_picks=true

The Reserve Bank of Australia frequently seeks feedback on the health of the economy. It might want to call the debt counsellors soon.

Homeowners, consumers and property investors around Australia are making more calls to financial helplines as three warning signs back up the spike in demand: mortgage arrears are creeping up, lenders’ bad debt provisions have increased and personal insolvencies are near an all-time high.

“It’s steadily out of control — I don’t know of too many financial counselling services where demand doesn’t exceed supply,” said Fiona Guthrie, chief executive officer of Financial Counselling Australia, who says the biggest increase in calls is from people suffering mortgage stress. “There are more people who have got mortgages that they can’t afford to pay.”

Australia’s households are among the world’s most-indebted after bingeing on more than $1 trillion of mortgages amid a housing boom that’s fizzled out in parts of the country, but still roaring in Sydney and Melbourne.

While most are capably servicing their debts, a worsening of credit metrics has seen executives and analysts take a more cautious tone. It’s also a key factor in the central bank’s rate decisions this year, as RBA governor Philip Lowe places financial stability at the forefront of monetary policy.

The concerns are understandable. Australians’ private debt has soared to 187 per cent of their income, from about 70 per cent in the early 1990s, encouraged by low interest rates. In a November speech, Lowe said that while most households are managing these levels of debt, many feel they are closer to their borrowing capacity than they once were.

The governor noted Australia’s divergent housing market on Tuesday when the RBA left the benchmark cash rate at a record-low 1.5 per cent in its first decision of the year, saying conditions “vary considerably” around the country as prices in some markets continue to rise “briskly.”

“There’s so much household debt that a couple of rate hikes here would completely knock the wind out of the housing market, and a lot of people would be impacted by it,” said Gareth Aird, economist at Commonwealth Bank.That’s partly why he doesn’t think the RBA will lift rates until 2018 at the earliest.

————

“Australia’s households are among the world’s most-indebted after bingeing on more than $1 trillion of mortgages amid a housing boom that’s fizzled out in parts of the country, but still roaring in Sydney and Melbourne.”

welcome to my world..

“There’s so much household debt that a couple of rate hikes here would completely knock the wind out of the housing market, and a lot of people would be impacted by it,”

indeed..

401

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~ by seeker401 on February 10, 2017.

8 Responses to “With $1 trillion of Australian mortgages the RBA might be getting worried”

  1. i thought there is more gold out there. . . is there?
    AU/AG is still very much controlled post Obama. the gold rally did not eventuate under Trump. U308 booMM..

    i think aussie real estate has peaked last year.

  2. Would you say a mall is like a franchising business..? only the mall owner wins. my accountant told me – majority of small renters running their shops are not making enough to survive. Heck even the big ones like DickSmith did not survived let alone small ones. That’s why they worked for nothing & closed up.. but more are ever willing to take their chances.

    What about big franchised courier companies..owners operators are like bunnies starring at the headlights.

    How about fast food eh..? people are naive to be exploited. And there are an un-ending supply of slaves from the migrant-pool. As for the owners – good luck. . here’s another typical example (who can resist a $5 pizza?) :

    http://www.smh.com.au/interactive/2017/the-dominos-effect/

    ..is it the government? is it ASIC..? is it the system? or is it Keynesian economics/financial model? is it the way of the world?

    • yeah 5 bucks is unreal..you cant buy good fresh food for 5 so you do the easy thing..malls go through tenanats like hot dinners..only the landlord wins..

  3. meanwhile in Melbourne…


    Melbourne gone completely mad

    Pedestrian traffic lights depicting female figures will be installed in Melbourne’s CBD today as a part of a lobby group’s push for gender equality.
    Ten female pedestrian figures will be installed on traffic lights at the intersection of Swanston and Flinders streets as part of a VicRoads-approved 12-month trial.
    The Committee for Melbourne — a non-profit organisation comprising more than 120 Melbourne business and community groups — is behind the move.
    Chief executive Martine Letts said having only green or red silhouettes of men discriminated against women.
    “The idea is to install traffic lights with female representation, as well as male representation, to help reduce unconscious bias,” she said.
    Ms Letts said the group wanted to see female and male representation on all pedestrian crossings.
    “We know that Melbourne is the world’s most liveable city and we would really like to see Melbourne also known as the world’s most equal city.
    “The aim is to move towards one-to-one male and female representation across the state of Victoria.”
    It costs an average of $8,400 to change six traffic lights.
    ‘Culture of sexism’ includes small issues, minister says

    Ms Letts said some people had questioned the move, but said the program was backed by Victorian Governor Linda Dessau.
    “Some people have expressed a little scepticism wondering whether it’s gesture politics rather than having any real substance,” she said.
    “But these symbols are a practical and meaningful way to demonstrate that in fact 50 per cent of our population is female and should therefore also be represented at traffic lights.”
    Minister for Women Fiona Richardson said the use of a woman’s figure on pedestrian crossings would make public space more inclusive of women.
    “There are many small — but symbolically significant — ways that women are excluded from public space,” she said in a statement.
    “A culture of sexism is made up of very small issues, like how the default pedestrian crossings use a male figure — and large issues such as the rate of family violence facing women.”
    Evan Mulholland from the Institute of Public Affairs think tank labelled the move “politically correct gesturing by policy makers that want to feel good about themselves”.
    “Ordinary Victorians are concerned about job security, rising crime and transport infrastructure,” he said.
    “If this is what our politicians, bureaucrats and policy makers think is the biggest issue facing road users then perhaps it goes a long way to understanding why we are stuck in traffic everyday.”
    The program has been funded by the Committee for Melbourne and Bayswater company Camlex Electrical.
    Ms Richardson said taxpayer money had not gone into the initiative.
    Last year the City of Yarra paid tribute to Victoria’s first female councillor, Mary Rogers, by placing her silhouette in a pedestrian crossing at a major intersection in Richmond.
    http://www.abc.net.au/news/2017-03-07/female-traffic-light-signals-melbourne-pedestrian-crossing/8330560

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