The Balance Sheet of Australian Households is Staggeringly Healthy

Discussion in 'Property Market Economics' started by wombat777, 8th Nov, 2019.

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  1. wombat777

    wombat777 Well-Known Member

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  2. Marg4000

    Marg4000 Well-Known Member

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    Because it is an average. Like “weekly earnings”.

    The person living in a huge Sydney harbourfront mansion is vastly different to a person living in a tiny run down unit out in a low socio-economic outer suburb.
     
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  3. New Town

    New Town Well-Known Member

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    I'm highly leveraged myself, but the obvious answer to why be worried about high debt is the asset value falling.

    It does look good but remember, things looked mostly healthy moments before the GFC... o_O
     
    Last edited: 8th Nov, 2019
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  4. TSK

    TSK Well-Known Member

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    Would be interesting to see median and upper lower quartile, this range would give a much better analysis vs averages...
     
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  5. icic

    icic Well-Known Member

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    Australia is actually have better wealth distribution than most of the developed nations. We were the top median wealth major economy in the world in recent past
     
  6. Empire

    Empire Well-Known Member

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    Probably obvious but the liability doesn't drop when house prices drop because people who are fully leveraged are tied into the agreement.
    If there's a recession, it's the people who have recently bought and lose their job that have the problem.
    I guess the question is how to keep the game going for another 20 years now that interest rates are this low.
     
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  7. Waterboy

    Waterboy Well-Known Member

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    The balance sheets may look "healthy" because those are mostly made of a lot of paper gains. However, many Australians have a Liquidity problem.

    Most Australians couldn't cover $1,000 in an emergency | Savings.com.au

    • Only 45% could cover an unexpected $1,000 emergency expense with their savings.
    • More than half of respondents (56%) could only cover living expenses for up to 3 months.
    • 19% of those respondents would only be able to cover living expenses for less than 2 weeks.
    • Almost one in three Australians surveyed have struggled to pay for the essentials, being such as food, housing, utilities or health care in the last 12 months (30%).
    • 48% of respondents who own credit cards do not pay off their closing balance every month.
    • 43% of Australians surveyed would struggle financially if their pay was delayed by two days.
     
  8. marmot

    marmot Well-Known Member

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    The actual name given by the OP actually cracks me up.
    Take away or threaten to modify some tax laws regarding negative gearing and it all goes south pretty quick smart.
    If for any reason immigration slows right down the market would take a hit as well.
    Then you have billions of dollars in foregone revenue by the various state governments for stamp duty relief and FHOG.
    What happens to the market if the state government suddenly finds themselves in massive debt and climbing.
    Services have to be cut.
    Perth is a great case study of a government left with billions of dollars in debt and no meaningful immigration for a long time , and lots of people never saw it coming.
     
  9. Car tart

    Car tart Well-Known Member

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    Im sorry but a survey where the analysis is not reported, and on a click bait site, is of less than zero value.

    IE, compare the same question phrased differently:

    If you had an emergency repair to fix your car could you find $1,000?

    Compared to:

    If you find that your mother is dying, could you gather the money to fly interstate to her immediately and take a few days off work to be with her? (at a cost of say $1,000)
     
  10. icic

    icic Well-Known Member

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    1000 is too small of a sample to be statistically relevant. Any indication on demographic, location and age group of the people the survey? The site has an agenda too
     
  11. Peter2013

    Peter2013 Well-Known Member

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    Or those on Interest-Only, hence why APRA is targeting these.
     

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