{"id":14443,"date":"2017-11-04T01:00:34","date_gmt":"2017-11-03T14:00:34","guid":{"rendered":"http:\/\/realestatetalk.com.au\/?p=14443"},"modified":"2017-11-04T01:00:34","modified_gmt":"2017-11-03T14:00:34","slug":"video-rba-is-worried-about-mortgage-levels","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/video-rba-is-worried-about-mortgage-levels\/","title":{"rendered":"VIDEO – RBA is worried about mortgage levels"},"content":{"rendered":"

[powerpress]
\nTrasncript:<\/strong>
\nReserve Bank of Australia governor Philip Lowe is worried about what will happen to highly leveraged Australian households when rates return to what he has called \u201cnormal\u201d levels<\/em>.\u00a0\u00a0 That should be sufficient warning that the rates we have now are not normal and borrowers should not be factoring in that they will continue.\u00a0\u00a0 The RBA governor shared his concerns around sluggish wage growth and record levels of household debt.\u00a0\u00a0 He said the recovery in the global economy is a sign that economic growth in the advanced economies has become self-sustaining, rather than just being dependent on monetary stimulus.<\/em>\u00a0\u00a0 He pointed out that it would also lift the return to many savers who have been receiving very low returns on interest-bearing assets for a decade now.\u00a0\u00a0 Investment strategies that looked sensible when interest rates were very low tend not to look so good when interest rates are higher.\u00a0 Property investment and imbalances in the mortgage market have been on the RBA\u2019s radar since 2014. The central bank\u2019s fears triggered APRA\u2019s macro-prudential measures that continue to impact residential lending today.\u00a0\u00a0 The burning question is how we deal with a higher level of household debt and higher housing prices, especially in a world of more normal interest rates.\u00a0\u00a0 Higher levels of debt also mean that household spending could be quite sensitive to increases in interest rates, something the Reserve Bank will be paying close attention to according to Mr Lowe.\u00a0 His comments follows those made\u00a0this week by RBA assistant governor Luci Ellis, who warned that even the best lending standards might not be enough to protect borrowers and lenders from an economic shock.\u00a0\u00a0 Following on from that \u2026\u2026CoreLogic\u2019s latest Property Pulse Report has analysed the state of household debt nationwide.\u00a0\u00a0 The results show higher income households are more likely to be over-indebted than lower income households.\u00a0 The report considers a household to be indebted if their current debt is either at least three times their income or 75 per cent\u00a0and over of the value of their assets.\u00a0 On those measures 21.6\u00a0per cent of households are over-indebted and almost 52 per cent of households not over-indebted.\u00a0\u00a0 26.4\u00a0per cent of households have no debt.\u00a0 Lower income households are more likely to be debt-free compared to higher income households, which is reflective of many lower income households having paid off their debt.<\/p>\n","protected":false},"excerpt":{"rendered":"

[powerpress] Trasncript: Reserve Bank of Australia governor Philip Lowe is worried about what will happen to highly leveraged Australian households when rates return to what he has called \u201cnormal\u201d levels.\u00a0\u00a0 That should be sufficient warning that the rates we have now are not normal and…<\/p>\n","protected":false},"author":176692471,"featured_media":14451,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[10,13,29],"tags":[131],"class_list":["post-14443","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-kevin-turner-sponsored-channels","category-latest-story","category-video","tag-videos"],"yoast_head":"\nVIDEO - RBA is worried about mortgage levels - Realty Talk<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/channels.realty.com.au\/realtytalk\/video-rba-is-worried-about-mortgage-levels\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"VIDEO - RBA is worried about mortgage levels - Realty Talk\" \/>\n<meta property=\"og:description\" content=\"[powerpress] Trasncript: Reserve Bank of Australia governor Philip Lowe is worried about what will happen to highly leveraged Australian households when rates return to what he has called \u201cnormal\u201d levels.\u00a0\u00a0 That should be sufficient warning that the rates we have now are not normal and...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/channels.realty.com.au\/realtytalk\/video-rba-is-worried-about-mortgage-levels\/\" \/>\n<meta property=\"og:site_name\" content=\"Realty Talk\" \/>\n<meta property=\"article:published_time\" content=\"2017-11-03T14:00:34+00:00\" \/>\n<meta name=\"author\" content=\"rolanrush\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"rolanrush\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/video-rba-is-worried-about-mortgage-levels\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/video-rba-is-worried-about-mortgage-levels\\\/\"},\"author\":{\"name\":\"rolanrush\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/#\\\/schema\\\/person\\\/384a57ac9e52cb9bf19896cb15eaa52d\"},\"headline\":\"VIDEO – RBA is worried about mortgage levels\",\"datePublished\":\"2017-11-03T14:00:34+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/video-rba-is-worried-about-mortgage-levels\\\/\"},\"wordCount\":399,\"commentCount\":1,\"image\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/video-rba-is-worried-about-mortgage-levels\\\/#primaryimage\"},\"thumbnailUrl\":\"\",\"keywords\":[\"videos\"],\"articleSection\":[\"Kevin Turner\",\"Latest Stories\",\"Videos\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/video-rba-is-worried-about-mortgage-levels\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/video-rba-is-worried-about-mortgage-levels\\\/\",\"url\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/video-rba-is-worried-about-mortgage-levels\\\/\",\"name\":\"VIDEO - 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