Mortgage rates are low but mortgagees are worried
Over the last month some interesting data was released. First, the Westpac/Melbourne Institute consumer confidence figures showed that mortgage holders are much less confident than they were. At the same time, the ANZ published some stats showing that housing affordability was its best for a few years.
This doesn't make much sense really. Interest rates are low by long term standards. Even though the banks put their rates up last year, and ANZ put theirs up a smidgem recently, the Reserve Bank cuts mean that home loan rates are lower now than they've been for a long while. This isn't the sort of situation that should make home owners less confident.
House prices are down - maybe that's it
The best reason I can find for this loss of confidence is that house prices are down. Hmm, that would make sense if they fell in 2012, but they didn't. House prices fell last year, and confidence is down this year.
I can't believe that everyone was blind to the falls in prices in 2011. Every newspaper was talking about it - we all knew our house prices were sliding.
So what have Gen Ys got to do with falling confidence then?
My daughters are Gen Y, so like any parent I don't want to believe anything bad about these perfect angels, but then again, they've had it rather good! Seeing the world from their point of view, over the last decade, they've had jobs, had a place to sleep, someone to bail them out and a booming economy. Of course, they haven't always used those parental safety valves - but they've appreciated them being there.
Now, rather than the economy being a 10 out of 10, it's only an 8 out of 10. For those of us old enough to remember 4 out of 10 economies, 2012 is pretty good. yes, unemployment is pushing into the high 5s, but most people still have jobs, and even with issues in Europe, the world isn't falling apart.
For Gen Ys though, any whiff of a problem is scary. Euro debt problems - aargh! China is slowing - Nooo! Tony Abbott says prices will go up because of the carbon tax - Yikes! If there is one thing that Gen Ys want it is certainty, and even though the fundamentals in Australia are strong, these are uncertain times.
You have shown a link to mortgagees
Gosh, you are right. So let's get to that. First of all, a lot of these Gen Ys are the ones who have bought the new houses in the 'burbs over the last few years. They are loved up, and taken out their first mortgage, and suddenly have responsibilities. You mean the bank wants me to pay this money EVERY MONTH?? So, it's perfectly understandable if the little dears are a bit worried about everything.
|No wonder Gen Y parents look worried!|
There we have it, because the world isn't perfect anymore and Gen Ys have to stand on their own two feet, its their parents who cop it. Thanks kids!
Let me know what you think