Time to Panic in Australia
Australians’ private debt has soared to 187 per cent of their income. Debt is up from about 70 per cent in the early 1990s.
The jobless rate rose for the second straight month in December to 5.8 per cent, and underemployment, the number of workers wanting more hours, is near an all-time high. Wage growth is the lowest on record.
Australia has one of the world’s biggest property bubbles. In some sections of the country, prices are already under severe price pressure. The entire country will soon face that problem, at least in my opinion,
The Financial Review reports There’s $1 trillion of Australian Mortgages and Some Now Worry of What’s Next
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.
RBA governor Philip Lowe places financial stability at the forefront of monetary policy.
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