300,000 people facing home loan default in Australia
By Aussies2007
@Aussies2007 (5336)
Australia
February 2, 2008 8:43pm CST
Economists predict the number of Australians likely to default on their home loans this year will increase because of rising interest rates, massive credit card debt and falling house prices.
Research by JP Morgan and Fujitsu Consulting quoted in Fairfax publications suggests 750,000 home owners will be hit by 'mortgage stress' in the coming months.
It is anticipated up to 300,000 of those will default on the loan and could have their homes repossessed.
JP Morgan spokesman Brian Johnson says one of the factors driving the problem is massive credit card debt.
"The fact is, the average household in Australia [spends] over three months of its disposable income on credit card debt," he said.
Welcome to the rat race with all its gadgets, luxury cars and holidays in Bali.
You can have it all... while I enjoy the peace and quiet of the bush.
2 people like this
5 responses
@Adoniah (7513)
• United States
3 Feb 08
Wow, it sounds just like the United States. The whole world is going down the tubes isn't it. The problem here is they lent all this money out on loans that could go up as the rates went up and now the people cannot make the payments at the new rates. People are not very bright to begin with.
Of course, they only pay the minimum out on their credit cards so they will be paying on those til the day they die and never pay those off.
I choose not to have any credit cards. Or buy anything on credit. It is cash or I do not own it.
Shalom~Adoniah
1 person likes this
@Aussies2007 (5336)
• Australia
3 Feb 08
Yes it is the same in Australia.
We had 6 or 7 interest rate increase since 2004.
Someone said last week that the world was in its worse financial crisis since WW2.
So yes... you could say that the world is going down the tube.
@lingli_78 (12822)
• Australia
3 Feb 08
well, i just bought a house last august (2007) and i already experience 3 times interest rate rise until now... i should have fixed it when i bought it... anyway, there is nothing to regret and i always believe in God... His grace and mercy is sufficient for me... fortunately, i always manage my cash flow well and i don't spend beyond what i can afford... hence, i don't have a credit card debt... i cross my fingers that i would never have to have a credit card debt and i would never have to lose my house because of this situation... i pray that the situation will get better soon...
@creationhub (3066)
• Malaysia
3 Feb 08
One of the worst reasons for being in debt is credit card mismanagement. In many developed as well as developing countries, the credit card debts account for a major portion of non performing loans.
People has got to get real and plan to counter this. None of us can stop inflation or recession. But, the least we could do is to ensure we do not fall victim to them. That is why today, I am working hard to pay up my house mortgage and then to save for a cash pool for retirement.
If we have a fully paid up home, then eating and spending less on other things would not be an issue. I do hope that mylot members reading this post would all begin to plan for their financial future, no matter what their ages may be.
@suehan1 (4344)
• Australia
3 Feb 08
well i use to own my own home,and sold it as i could see that there was no way i was going to manage in the future with the interest rates going to go up.i have got rid of all credit cards and what i can not afford to pay in cash i do not buy.i think the bush sounds great.cheers sue
@cydzzj (354)
• Australia
3 Feb 08
So is that means the price of the property will come down soon? If it means like that, may someone will think it is a good news. Because they may not apply a mortgage for the house, or they only need a small amount from mortgage.
But for most of the people who have a home loan, it really a very bad news.
