There is an interesting article in today’s AGE newspaper which talks about some of the issues preached here at whocrashedtheeconomy.com.
JOHN HOWARD may claim to have no rabbit this election — or even a hat to pull one out of — but he does have an elephant. . . .
It’s called debt, and Australia has never had more of it, the article writes.
It mentions Australian’s now have $160 debt for every $100 of disposable income, and that Australian’s are now spending 12 per cent of their disposal income on interest payments, stats we graph and discuss here.
It is good to see an article published showing the true state of household budgets. Normally the media only publishes hype supporting that things can’t get much better for the economy.
Mix that with young home seekers facing the worst housing affordability since 1984 and housing debt for everyone continuing to sky-rocket, and the societal response could be similar to a recession, [Dr Peter Brain, executive director of the National Institute of Economics and Industry Research] says, even though the national economy looks good on paper.
“Maybe what they’re seeing is the same sort of a particular ground shift that a recession causes,” Brain said. “Under Labor it was the businesses that stuffed up the economy. Under the Liberals, it is the households.”
It also paints some cautious figures about the state of Australia’s subprime mortgage market. In figures collected by Standards & Poor, subprime loans in arrears for more than 30 days was sitting at 14.2% at the end of February, up 34% compared to 10.6% during the middle of last year. RBA data shows low-doc and sub-prime loans made up 9% of the mortgage market in 2006.
» The home front – The Age, 2nd June 2007.