We deep dive on the thorny question of household finances and the proportion of disposable income going to pay the rent or mortgage, using data from our core market model.
We find that conditions are quite severe in many parts of the country, but it is not uniformly spread. Which households are most under the pump in terms of these critical ratios?
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Details of our one to one service are here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/
Go to the Walk The World Universe at https://walktheworld.com.au/
In our surveys we include a question on whether households trust the federal and state governments to do the right thing for them. And the answer is a resounding, no. The question of whether we do trust those elected officials who theoretically at least should be looking after our interests, seems to highlight that in many countries, from Australia, UK, Canada, New Zealand and America, Government is on the nose.
Perhaps this is one reason why there are attempts in train to close down free speech, as illustrated by the misinformation and disinformation bill currently on the books in the Australian parliament. See my earlier post about this MAD bill and why it must be resisted.
In our surveys we find many households struggling with rising costs and flat real incomes, an ability to get ahead, or find a place to live, and ever more pressure on family relationships as a result. In other words, many blame bad government policy for their own predicaments. They are right.
The recently released report on Government action during the COVID period cuts to the heart of the question of trust as the three-person inquiry panel slammed the approaches towards such issues as lockdowns, vaccine mandates, and school and border closures, saying they lacked transparency and compassion, and were often not evidence-based. Now let me say straight away the scope of this inquiry was deliberately hobbled to avoid key questions around vaccines, and other issues, which is in itself shameful, but even so, the COVID-19 inquiry found that heavy-handed, inconsistent and insensitive pandemic restrictions meant people were unlikely to accept such measures again.
Economic modelling presented to the inquiry found that inflation could have peaked at about 6 per cent, instead of 8 per cent in December 2022, if the federal government’s more than $300 billion of pandemic spending and Reserve Bank of Australia’s near-zero interest rate policies were less stimulatory.
So all up, we can draw three conclusions.
Too much tax payer money was thrown at the problem in a poorly targeted inflation stoking manner. This is why inflation loomed to the fore in the past few years.
Too much was through directly and indirectly at the housing market, stoking home prices and rents, and exacerbated the distortions which were already in the market. No wonder prices have accelerated relative to incomes. No wonder too the construction sector is all but wrecked, with many firms subsequently failing while construction costs rise.
And there is still a resistance to admit errors both from Government and the RBA. Those in positions of responsibility may have done their best, but it was simply not good enough.
We expect, and rightly demand more from our elected leaders. They collectively failed us and the fallout continues to this day.
The right critical observation is that trust will be hard to recover. Given recent behaviour, it may never be healed, which spells risks to democracy itself. Queue the MAD bill.
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Go to the Walk The World Universe at https://walktheworld.com.au/
This is the final party of my July Financial Pressure analysis, where we answer specific questions from our audience.
First part here: https://youtu.be/eRM8alMOi4g Second part here: https://youtu.be/sCW1_91LDQo
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Go to the Walk The World Universe at https://walktheworld.com.au/
Today’s post is brought to you by Ribbon Property Consultants.
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Digital Finance Analytics (DFA) Blog
You Asked, We Answered: More Households In Financial Stress!
We update our modelling to the end of June 2024, examining the latest in mortgage, rental, investment and financial stress across Australia.
While the upcoming tax cuts and energy support may assist, the truth is about half of households are under sever pressure, and with rates expected to be higher for longer, its time for people to consider tactics to improv their cash flow.
You can subscribe to the DFA data set via Patreon, https://www.patreon.com/DigitalFinanceAnalytics
You can find out more about our One to One service here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/
If you want me to include a specific post code in one of my future shows, put the details in the comments and I will try to include it.
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Go to the Walk The World Universe at https://walktheworld.com.au/
This is the fifth part in a series of posts which deep dives into our latest survey results, with a focus on overall financial stress across families, which is rising further.
See the first part, where we describe our approach here: https://youtu.be/3oidJ_XKgAE
The second part on mortgage stress is here: https://youtu.be/6g6cb1mU2zQ
The third part on rental stress is here: https://youtu.be/ZZ0OyEFaplM
The fourth part on investor stress is here: https://youtu.be/JF0FuwzQSSI
The full 2,000 post code series is available by subscription from our Patreon channel below.
If you want details of a particular post code, drop it in the comments below, and I will endeavour to add it to a later show.
This is the first in a series of posts which deep dives into our latest survey results, with a focus on financial stress, which is rising further. This episode provides an overview, subsequent episodes will dive into the details of mortgage, rental, investor and financial stress.
If you want details of a particular post code, drop it in the comments below, and I will endeavour to add it to a later show.
The full 2,000 post code series is available by subscription from our Patreon channel below.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Find more at https://digitalfinanceanalytics.com/blog/ where you can subscribe to our research alerts or send us a message.
Please consider supporting our work via Patreon: https://www.patreon.com/DigitalFinanceAnalytics
Digital Finance Analytics (DFA) Blog
Financial Pressure Reports: May 2024 - 1. Overview
The combination of high prices and interest rates is seeing affordability become extremely stretched at a time when cost-of-living pressures more generally are also constraining incomes, according to a recent Westpac Survey.
In response, would-be buyers are pushing the timing of their planned purchases back – less than 10% expect to transact in the next 6mths, the lowest share across all survey waves.
The prospective flow of first home buyers is showing the biggest response to these pressures, planned purchases down materially on last year. Just 2% of those surveyed expecting to become a first time owner in the next year.
Outside of the first home buyer space the story looks to relate more to the interest rate situation. Prospective investor buyers have pared back plans for the next six months.
And sales results for this weekend confirms the slowing market, despite some properties still exceeding reserves in some places. As reported in the AFR, the prospect of interest rates staying high has spooked many buyers, making them less likely to spend above their budgets.
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Go to the Walk The World Universe at https://walktheworld.com.au/
Today’s post is brought to you by Ribbon Property Consultants.
Digital Finance Analytics (DFA) Blog
Property Buyers’ Plans Destroyed By “Higher For Longer” Rate Trends!
In today’s show we look at the latest from our surveys – how many households are really under financial pressure – because there are big differences between the “official” figures and those shown in other surveys, and data points, including the rise in calls to financial help lines and hardship supports.
This is the first in a series of shows, culminating with a live show on Tuesday 9th April 2024.
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Go to the Walk The World Universe at https://walktheworld.com.au/
