Reply To: RBA Raises Rates Another 50bps to 1.85% as Expected

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Keymaster

Reserve Bank of Australia Deputy Governor Michele Bullock speaking on:

How are Households Placed for Interest Rate Increases?
via Reuters

further rate increases will be needed in the months ahead
Financial stability risks from households “are a little elevated” but unlikely to be substantial
Risks will be important in deciding size and timing of future interest rate rises
Risks will be influenced by the future path of employment growth
Current strong growth in employment means people will have jobs to service their mortgages
Aggregate household balance sheets are in very good shape
Households have saved a large amount of money since the onset of the pandemic
Borrowers with the most debt also tend to have the highest liquidity buffers
Household sector as whole has accumulated sizeable equity via higher housing prices
House prices would have to fall a fair way for negative equity to become a systemic concern
Much of the debt is held by high-income households that have the ability to service their debt