The Oceania Times

Top Menu

  • About us
  • Contact Us
  • Cookie Policy
  • Disclaimer
  • Privacy Policy
  • Terms and Conditions

Main Menu

  • Australian Economy
  • Brokers
  • Commodities
  • Currencies
  • Financial Market
  • Gold and Precious Metals
  • Investment
  • Stock Shares
  • About us
  • Contact Us
  • Cookie Policy
  • Disclaimer
  • Privacy Policy
  • Terms and Conditions

logo

The Oceania Times

  • Australian Economy
  • Brokers
  • Commodities
  • Currencies
  • Financial Market
  • Gold and Precious Metals
  • Investment
  • Stock Shares
  • Secretary Antony J. Blinken at the U.S. Partnership for Global Infrastructure and Investment Investor Forum

  • Nvidia, other US chip stocks stall over valuation, industry worries

  • Treasuries, Korea, Buffer ETFs, Cozy Real Estate

  • 5 Safe Investments During a Recession

  • Manx Financial Group sees surge in shares amid higher H1 2023 pretax profits By Investing.com

Financial Market
Home›Financial Market›Home buyers brace for financial pain as economy sits on knife-edge

Home buyers brace for financial pain as economy sits on knife-edge

By Megan
June 3, 2022
85
0
Share:

A full percentage point increase would take the average repayment to $3592. Financial markets believe the RBA could have the official cash rate at 2.5 per cent by year’s end, which would translate into a monthly repayment on an $800,000 mortgage of $4295.

In Victoria, the monthly repayment on a $650,000 mortgage – currently at $2654 – would be $3450 if the cash rate sits at 2.5 per cent in December.

Masters said aiding the RBA was the high proportion of people either ahead on their repayments or on fixed mortgages. But by next year, as rates pushed higher and people rolled off low fixed-interest mortgages, there would be some pain for many Australians.

Masters, who is expecting a quarter percentage point rise on Tuesday, said it was not just an increase in mortgage repayments that could lead to trouble.

She cited Barrenjoey research showing the so-called “wealth effect” on the broader economy caused by a drop in house prices.

Loading

Data this week from CoreLogic showed dwelling values edging down by 0.1 per cent in May, the first fall in 20 months.

House values fell by 1.1 per cent in Sydney, 0.8 per cent in Melbourne and 0.4 per cent in Canberra. The three are the highest-priced capitals in the country.

Between 2017 and 2019, house prices in most capital cities dropped as lending conditions were tightened. This contributed to a slowdown in household consumption and overall housing activity as home buyers felt less wealthy because of the decline in the value of their properties.

Masters said the RBA would be very aware of the potential flow-on effect from overly aggressive interest rate rises on the broader property market.

Loading

AMP Capital chief economist Shane Oliver while it appeared even a small series of rate rises would knock consumer spending, the high proportion of people ahead on their mortgages would soften the blow.

The increased low- and middle-income tax offset that will start to flow to more than 10 million people from July 1 would also reduce the immediate financial pressures caused by higher interests.

But Oliver, who expects the cash rate to be between 1.5 and 2 per cent by year’s end, said it was dangerous to believe most home buyers could easily absorb rate rises, especially with house prices softening.

“While I expect that the economy can withstand more rate hikes, market expectations for 2.5 per cent by year’s end and over 3 per cent next year look over the top to me,” he said. “The RBA wants to slow spending to slow inflation, not crash the economy and knock inflation back to pre-pandemic levels.”

The Morning Edition newsletter is our guide to the day’s most important and interesting stories, analysis and insights. Sign up here.

Source link

Previous Article

Elon Musk has ‘super bad feeling’ about ...

Next Article

China and Australia’s dueling Pacific tours make ...

0
Shares
  • 0
  • +
  • 0
  • 0
  • 0
  • 0

Megan

Related articles More from author

  • Financial Market

    BTC, ETH have had a difficult 24 hours; Fed Chair Powell to blame? 

    August 27, 2022
    By Megan
  • Financial Market

    G-7 finance chiefs reaffirm unwavering support for Ukraine

    July 16, 2023
    By Megan
  • Financial Market

    Truist Financial Corp’s Remarkable Growth in iShares Core Total USD Bond Market ETF Indicates Confidence in the US Bond Market

    August 8, 2023
    By Megan
  • Financial Market

    London eyes more floats using GDRs

    July 4, 2023
    By Megan
  • Financial Market

    Investors remain ‘cautiously optimistic’ about platinum’s future

    July 27, 2022
    By Megan
  • Financial Market

    Saudi output cut, rate hikes, and more: Key factors driving crude oil markets next week

    June 25, 2023
    By Megan

Leave a reply Cancel reply

You may interested

  • Brokers

    Hirokazu Kore-eda’s’Broker’ Wins Ecumenical Jury Award for Best Film – The Hollywood Reporter

  • Gold and Precious Metals

    Barrick Gold: It Could Have Been Worse (NYSE:GOLD)

  • Currencies

    Ramaphosa’s South Africa and Turkey’s Erdogan find themselves in a dangerous place. Our currencies tell the story – The Mail & Guardian

  • LATEST REVIEWS

  • TOP REVIEWS

Timeline

  • September 21, 2023

    Secretary Antony J. Blinken at the U.S. Partnership for Global Infrastructure and Investment Investor Forum

  • September 21, 2023

    Nvidia, other US chip stocks stall over valuation, industry worries

  • September 21, 2023

    Treasuries, Korea, Buffer ETFs, Cozy Real Estate

  • September 21, 2023

    5 Safe Investments During a Recession

  • September 21, 2023

    Manx Financial Group sees surge in shares amid higher H1 2023 pretax profits By Investing.com

Best Reviews

Latest News

Investment

Secretary Antony J. Blinken at the U.S. Partnership for Global Infrastructure and Investment Investor Forum

SECRETARY BLINKEN:  Amos, thank you.  And Ajay, Janet, wonderful to be with you, but especially to be with everyone around this table.  I’m looking around at this lineup, and not ...
  • Nvidia, other US chip stocks stall over valuation, industry worries

    By Megan
    September 21, 2023
  • Treasuries, Korea, Buffer ETFs, Cozy Real Estate

    By Megan
    September 21, 2023
  • 5 Safe Investments During a Recession

    By Megan
    September 21, 2023
  • Manx Financial Group sees surge in shares amid higher H1 2023 pretax profits By Investing.com

    By Megan
    September 21, 2023
  • Recent

  • Popular

  • Comments

  • Secretary Antony J. Blinken at the U.S. Partnership for Global Infrastructure and Investment Investor Forum

    By Megan
    September 21, 2023
  • Nvidia, other US chip stocks stall over valuation, industry worries

    By Megan
    September 21, 2023
  • Treasuries, Korea, Buffer ETFs, Cozy Real Estate

    By Megan
    September 21, 2023
  • 5 Safe Investments During a Recession

    By Megan
    September 21, 2023
  • Secretary Antony J. Blinken at the U.S. Partnership for Global Infrastructure and Investment Investor Forum

    By Megan
    September 21, 2023
  • Australia’s economy: boom or bust?

    By Megan
    September 9, 2019
  • Australian economy suffers virus symptoms

    By Megan
    February 10, 2020
  • The stage is set for mining-led economic recovery

    By Megan
    December 1, 2020

Trending News

  • Investment

    Secretary Antony J. Blinken at the U.S. Partnership for Global Infrastructure and Investment Investor Forum

    SECRETARY BLINKEN:  Amos, thank you.  And Ajay, Janet, wonderful to be with you, but especially to be with everyone around this table.  I’m looking around at this lineup, and not ...
  • Stock Shares

    Nvidia, other US chip stocks stall over valuation, industry worries

    The nVIDIA booth is shown at the E3 2017 Electronic Entertainment Expo in Los Angeles, California, U.S. June 13, 2017. REUTERS/ Mike Blake Acquire Licensing Rights NEW YORK, Sept 21 ...
  • Investment

    Treasuries, Korea, Buffer ETFs, Cozy Real Estate

    Look to Unloved Sectors  The idea: The US equity market has had a tremendous run in 2023, but much of the rally has been concentrated in the Magnificent Seven. In ...
  • Gold and Precious Metals

    5 Safe Investments During a Recession

    In order to build an investment portfolio that can withstand tough economic periods, investors should consider assets with certain characteristics. Safe investments tend to help preserve capital. They provide stability ...
  • Financial Market

    Manx Financial Group sees surge in shares amid higher H1 2023 pretax profits By Investing.com

    Investing.com Published Sep 21, 2023 16:40 Manx Financial Group (LON:MFX) reported a 9% increase in its share price, reaching 24 pence and peaking at 25.4 pence earlier on Thursday. This ...
  • About us
  • Contact Us
  • Cookie Policy
  • Disclaimer
  • Privacy Policy
  • Terms and Conditions
© Copyright The Oceania Times. All rights reserved.

SUBSCRIBE TO OUR NEWSLETTER

Get our latest downloads and information first. Complete the form below to subscribe to our weekly newsletter.



    Input this code: captcha