Digital Finance Analytics (DFA) Blog
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From The New Daily. More than 600,000 low-wage workers in the services sector will suffer a wage cut on the first day of next month, after a judicial bench refused pleas to cancel or delay cuts to penalty rates. In a decision handed down on Monday, the Fair Work Commission denied requests from unions for the wage cuts to be postponed for … Continue reading “Fair Work Commission to cut wages within four weeks”
From Australian Broker. Structural headwinds in the property market could result in heightened risks to the Australian mortgage insurance industry, according to a major international ratings agency. In a new report from S&P Global Ratings, Insurance Industry and Country Risk Assessment: Australia Mortgage, analysts looked at the health of the industry and posited that the … Continue reading “Market headwinds to increase risk for LMI sector”
From The New Daily. When the ratings agency S&P Global downgraded its outlook for the Australian economy earlier this week, it would have caught many people by surprise. That hasn’t been the story coming out of Canberra in recent months. Treasurer Scott Morrison put on a sterling display of optimism during budget week, telling us … Continue reading “The ‘jobs growth’ myth leading us to breaking point”
RBA Governor Philip Lowe spoke at the Economic Society of Australia (QLD) Business Lunch. Of note is the data which shows one third of households with a mortgage have little or no interest rate buffer, and that the Reserve Bank does not have a target for the debt-to-income ratio or the ratio of nationwide housing … Continue reading “Household Debt, Housing Prices and Resilience”
From The Adviser. APRA’s latest curb on interest-only loans aims to reduce risk in the mortgage market, but several leading brokers have told The Adviser that all is not what it seems. When the Australian Prudential Regulation Authority (APRA) announced in March that it expected banks to limit the flow of new interest-only loans to … Continue reading “Brokers have their say on IO crackdown”
From The New Daily. Almost nothing is to be seen of Australia’s housing crisis in the latest inflation figures. Wednesday’s Consumer Price Index (CPI) from the Australian Bureau of Statistics showed just a 0.5 per cent increase in inflation this quarter, up 2.1 per cent over the past 12 months. Over the same period, house … Continue reading “Inflation number misses the housing crisis”
From wsws.org. Australian house prices have continued their unprecedented ascent, with median home values in Sydney this week hitting a record $1.15 million and in Melbourne, $826,000, after rising by 13.1 percent and 7.6 percent respectively in the first three months of the year. The frenzied growth of the east coast market has prompted a … Continue reading “More warnings about the Australian housing market”
From Financial Standard. KPMG warns any increase in Australia’s historically low interest rates would cause serious economic problems and affect households across the entire financial spectrum, from rich to poor. The industry consultant said one of its biggest concerns is that Australian households have progressively increased debt levels at rates faster than their disposable incomes … Continue reading “Negative gearing exposing Australia’s poor: KPMG”
From The Sydney Morning Herald. Deloitte Access Economics’ quarterly business outlook, released today, predicts the official cash rate of 1.5 per cent will climb slowly in 2018 and 2019 to reach 3 per cent in the early 2020s. The Reserve Bank was well aware “interest rates are now a massively more potent weapon for slowing … Continue reading “‘This thing’s gonna blow’: Top economists’ interest rate warning”
We updated our mortgage stress models recently, which showed that around 669,000 households are in stress, which represents 21.8% of borrowing households. Those results are a point in time view of households finances. The RBA also said that one third of households have no mortgage buffer. Today we take a longer term view of the … Continue reading “Tracing The Rise Of Mortgage Stress”