This is the full presentation from Michele Levine’s State of the Nation Presentation on Financial Risk.
Key findings of this in-depth industry spotlight include:
· Home ownership in Australia is likely to continue its downward trend whilst house price increases outpace the increase in household incomes;
· Mortgage stress levels are likely to remain elevated even with the likelihood of further interest rate reductions by the Reserve Bank of Australia (RBA) over the coming 12-18 months. Official Australian interest rates are already at a record low of 1.5% and likely to converge with the 0% interest rates found in comparable Western economies including the United States, United Kingdom, Canada and the EU;
· Household debt levels could become a risk for both households and banks should general economic conditions turn down;
· The reliance on dual incomes for home loans repayments by many Australian families is a risk in itself with the increasing trend towards part-time work throughout much of the economy and with the additional factor of low wages growth;
· Mortgage risk shows some potential problems for Australia’s older cohorts, the over 60s, if older Australians retire with debt still outstanding.
See the related press release here