Bankruptcy Wagga Wagga,Liquidators Wagga Wagga,Insolvency Wagga Wagga
Today in the news, former economics advisor John Adams indicated that Australia is too late to stop an ‘economic apocalypse’ regardless of his incessant warnings to the political elites in Canberra. He went on to advise the Reserve Bank to raise interest rates to stop household debt getting further out of hand.
This bubble is very easy to express. Confidence! It’s the misled perception that Australia’s last 20 years of sustained economic growth will never experience any kind of correction is most unsettling. Australia survived the GFC and a mining boom and bust. At the same time, Sydney and Melbourne house prices have not missed a beat or taken a backward step. Unfortunately, the decision makers and powerful elite in Australia live in these two cities, and see Australia’s economic problems through a completely different lens to the remainder of the country. It’s a two-speed economy spiralling uncontrollably.
I concede that this looming crisis isn’t just as simple as house prices in our two biggest cities, however the average house prices in these cities are ever rising and contribute significantly to total household debt. The specialists in Canberra understand that there’s an overheated house market but seem to be despised to take on any genuine measures to correct it for fear of a house crash.
As far as the remainder of the country goes, they have a completely different set of economic concerns. For Western Australia and Queensland especially, the mining bust has sent house prices sinking downwards for years now.
Among one of the warning signs hpw that illustrate the household debt crisis we are starting to see is the surge in the bankruptcy numbers throughout the entire country, especially in the March 2017 quarter.
In the insolvency sector, our firm are inspecting the disastrous effects of house prices going backwards. Even though it is not the primary cause of personal bankruptcies, it certainly is an integral factor.
House prices going backwards is just part of the predicament; the other thing is owning a home in Australia allows lenders to put you in a very different space as far as borrowing capacity. Simply put, you can borrow far more if you are a home owner than if you are not a home owner. I bankrupt people everyday and the extent of debt differs largely from the non-home owner to the home owner. Lending is hinged on algorithms and risk, so I suppose if you own a home you’re more likely to have stable income and less likely to wind up bankrupt, so consequently you can borrow more. If you own a home in Melbourne or Sydney, you’re a safer risk than if you own a home in Mackay, simply due to the fact that in one area the median house prices are booming and the other is going backwards, as it’s been doing so for years.
In conclusion, it seems we are running into a wall at full speed, and there are not too many people suggesting we slow down. If you would like to know more about the looming household debt crisis then give us a ring here at Bankruptcy Experts Wagga Wagga on 1300 795 575 or visit our website for more information: www.bankruptcyexpertsWaggaWagga.com.au