Negative Equity fears for Australian households

April 15, 2019

That dreaded phrase, negative equity, which has been clear of the headlines for many years here in the UK, but halfway across the globe it is a rumour that has a growing trend and likelihood of rearing its ugly head.

“Risks to the household sector have increased over the past six months given weak housing market conditions… ” stated RBA via their latest Financial Stability Review.

A report on the Finance Nine website looks at the warnings coming from the Reserve Bank that more and more households in Australia could be falling in to negative equity as property prices continue to fall. This situation could be damaging to many home owners and would be home owners where lending becomes tighter and the option to sell property to resolve situations becomes a negative financial decision.

The current rate of price falls is one of the largest on record as quoted by National Australia Bank (NAB) Group Chief Economist Alan Oster.

Title image provided free by Pixabay.

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