(43 days ago)
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.”
(43 days ago)
Time to Panic in Australia
Posted by Mish | February 8, 2017 2:26:07 | Economics ≈ 62 Comments
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 #1 rule of panic is simple: Panic before everyone else does.
Those thinking of buying a house in Australia now are out of their freaking minds. Yes, I have been saying this for quite some time. And many can point to profits. But those profits are all on paper. Try selling. It’s impossible for everyone to cash out.
Those who place their homes on the market now, with aggressive below-market pricing, will likely be able to find suckers. Those who think it’s too early to panic will likely to be trapped down the road.
Home are illiquid. It’s seldom too early to panic.
When selling real estate, it’s a catastrophe to panic after the panic has already started.