Housing Stress overrated

Discussion in 'Property Market Economics' started by Jacque, 28th Apr, 2008.

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  1. Jacque

    Jacque Jacque Parker Premium Member

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    "MEASURES of financial stress caused by rising interest rates are exaggerated because they do not take account of increases in real incomes, according to the Reserve Bank.

    The bank's deputy governor, Ric Battellino, told a Senate inquiry that rising house prices, not rising interest rates, were the main reason people were spending more of their income on mortgages"

    Going against the current train of thought that it's rising interest rates that cause mortgage stress, the RBA believes that it's increasing prices that are the ultimate contributory factor. Read the whole article here
     
    Jacque, 28th Apr, 2008
    #1