The Reserve Bank has continuously raised interest rates over the last several months. Doing so has caused consumer confidence to fall up to 23.9% according to Westpac chief economist Bill Evans. This drop was the largest fall in the last 32 years.
This drop may be a good thing as it may help to keep the Reserve Bank from raising rates even farther as it tries to combat inflation numbers. According to News.au, Evans said, "This indicates that the Reserve Bank's last rate hike, combined with further independent moves from the mortgage lenders, may have finally slowed demand such that inflationary pressures will ease."
Should interest rates fall, house markets would improve after struggling with the continued increases of interest rates and therefore repayments.
Still, not everyone is in a good position. According to JPMorgan and Fujitsu Consulting, some 300,000 Australian households will be in severe mortgage stress by the middle of this year. This will lead to many of them losing their homes. The reason behind this includes interest rates rises as well as the cost of living, which also continues to rise here.
The report also shows that some 700,000 households within the country are likely to be facing some level of mortgage stress by the middle of this year.
