You may well remember the previous Treasurer trumpeting on about the $250 billion dollars of household savings which we have over 2020 and 21. And Phil Lowe recently quoted a similar figure in one speech, though on the ABC 7:30 seemed to lower it to 200bn.
Those buffers came from multiple sources, including JobKeeper, other Government benefits, sanctions withdrawal from super, and of course direct household savings. We also know these same buffers are now being spent. The Buffers question in an important one, especially given the forecast for continued rising rate, and the impact on the overall economy.
In a recent RBA FOI, they discussed beefing up wording in a recent RBA Outlook, to “however, consumption growth could also be weaker than expected, for instance if asset prices were to decline or if the effects of higher inflation and interest rates weighed on discretionary spending by more than anticipated. This risk is most pronounced for households with relatively low savings buffers and high debt relative to income”.
Phil Lowe replied “When talking about uncertainties, I was a bit surprised there wasn’t more about how households/businesses/asset markets might respond to higher interest rates”. We agree, this becomes the critical.
ANZ Bank yesterday dramatically lifted its forecast for Australia’s official cash rate (OCR) to 3.35% by November 2022
Today’s post is brought to you by Ribbon Property Consultants. If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you. Buying property, is both challenging and adversarial. The vendor has a professional on their side. Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make. Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest. Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.
