The Government-funded Financial Helpline on track to receive record number of cases this year, with older Australians who can’t meet mortgage or rent payments over-represented, and counsellors starting to field calls from people struggling to switch to principal and interest mortgage payments. From The ABC:
“The phones just never stop now,” financial counsellor Greg said.
“They’re just going day after day, after day.
“You put the phone down, you pick the phone up again.”
Greg has been with the call centre for 14 years.
He said it’s never been so busy, now with record numbers of older Australians calling in, unable to pay rent, or make good on their mortgage repayments…
Karen Cox co-ordinates the Financial Rights Legal Centre, which runs the call centre.
“Call volumes are huge,” she said.
“We’re at capacity in terms of the number of calls we can take, in fact we’re a bit short staffed at the moment.”
For the first time, the National Debt Helpline has started fielding calls from Australians struggling to switch from interest, to principal and interest mortgage payments.
“We are seeing an increasing number of older Australians calling us,” Ms Cox said.
“Very occasionally we’re still seeing people who have just been granted a very large mortgage, even though they’re in their 50s or 60s, and one that’s set to go for a 25 or 30-year term.”
The macro data tells the story. Australia’s household debt is the second highest in the world:
As are debt repayments:
Meanwhile, the household savings rate has collapsed to post-GFC lows – negative after accounting for compulsory superannuation – as households attempt to maintain consumption in the face of falling real wages:
The whole economy is poised on a knife edge: debt is still running faster than income and is at record levels; house prices are falling; there’s still heaps of apartments to hit the market with settlement risk exploding; the interest-only mortgage reset; out-of-cycle mortgage rate increases; anaemic wages growth; and Labor’s negative gearing policy is still to come.
Sooner or later the debt piper will have to be paid.
