Poll Reveals Mortgage Stress among Australians

By | June 18, 2013

Up to the end of the current year’s first semester, Australia’s economy had been showing signs of improvement in most important areas. The manufacturing segment was still dragging the overall picture downward, as the mining industry still has not recovered from the recession, yet other performance indicators had shown proof positive that a turnaround to a more optimistic sentiment would be in the cards for the land Down Under. On the one hand, the year opened with a sensible improvement in the consumer confidence index, which had spent most of last year below 100 points. Finally, in 2013 it jumped past that marker, to indicate that the number of optimists was finally outweighing that of pessimists among Australian consumers.

This, in turn, was a sign of hope for better days, both for retailers, as well as for the banking industry. The home loans sector in particular seemed to be reaping the results of the central bank’s latest official cash rate cut, announced in November of last year, and rolled out by most major and less major banks in the country throughout the beginning of 2013 such as Bankwest home loans, which passed on the full rate cut. Online mortgage products were also gaining ground, as their rates and terms were proving better, by and large, than that of products available strictly offline.

However, several sets of data issued in early April started painting a strikingly different picture. Perhaps the most important such data was the one concerning the rate of unemployment, which went up beyond the analysts’ forecasts in March, by .2 per cent, from 5.4 per cent in February, to 5.6 per cent in March. While this may be a typical ‘silver lining’ scenario, since a rise in unemployment might improve the odds of yet another rate cut from the Reserve Bank of Australia, it is not the only reason for worry for bankers. A survey conducted by an important online mortgage comparison service revealed that 35 per cent of all Australian mortgage owners suffered at the hands of ‘mortgage stress’ over the past year.

According to the chief executive of the company that completed and published the poll, over 15 per cent of the people polled also said they had experienced major doubts over their ability to meet their repayment deadlines for their homes, over the afore-mentioned period of time. 10 per cent of them had to deal with such anxieties because of a pay cut forced upon them by their employer. Mortgage loans are stressful enough as it is, by all accounts – what contributes to this stress, Australians said, are the other rising costs of their living standards, from utility bills to interest rates. Needless to say, the uncertainty of their professional future and wage levels isn’t making the situation any easier either.

This, of course, leaves a great number of worried Aussies faced with no other option but to figure out where to save more money, in order to make their repayments in due time, since overdue mortgages are not really an option. 43 per cent of the people polled said that, if push comes to shove, they would give up on a holiday, while 29 per cent would relinquish dining out, in order to save more money on groceries. Another 15 per cent would even be willing to bring a stranger into their home, by renting out a room, so as to make the much needed extra cash for the mortgage. One thing is for sure: mortgages are cause for concern in the daily lives of Australian consumers and, by the looks of it, the situation is not about to get easier for them.