When is Australia going to collapse under a mountain of debt?

[AtW]

So you think a homeowner borrowing at 10x income could soak up a couple of interest point increases?

Probably not.

[scooterscot]

The pound hasn't just weakened - it has halved in value against AUD, which accounts for half of the increase alone

WHS.

I travelled to OZ some 5/6 years ago when you could buy a $2.6 for a pound, today that's $1.5.

I've found my skill set on offer @ a permie level typically around $150k.

[minestrone]

Last time I lived there an average VB programmer could expect to get a 5 bedroom air con house with a pool.

Australia took a bit of a hit in 2000ish and corrected itself when we should have, it is not a debt country.

[Moscow Mule]

Last time I lived there an average VB programmer could expect to get a 5 bedroom air con house with a pool.

Australia took a bit of a hit in 2000ish and corrected itself when we should have, it is not a debt country.

I expect them to spiral into a gloomy despair in a couple of days time...

[Gonzo]

The exchange rate won't always remain so strong for the Ozzie Dollar

Bear in mind that this is a part of the world where the banks still pay interest on savings. The banks are paying above the central bank rate (reserve bank rate 4.75% v 7 month term deposit rate of 6%), the banks really must need that deposit money but the result is strong demand for the currency.

I'm in New Zealand, they have not had a property crash, just no growth in prices for three years but the average house still costs ten times average earnings. They seem to think that things will shortly return to "normal" of ever rising prices allowing them to withdraw more and more equity to maintain their spending.

I'm not so sure about that. The mortgagee sales that I see are raising only 66% of the value of the outstanding borrowing on them. It is rumoured that the banks are only drip feeding these onto the market to avoid flooding it but I can't get any of my contacts to confirm or deny that. Interest rates are at historic lows and people will be vulnerable if they are raised.

My gut feeling is that there is a lot more debt pain still to come here but having said that the banks have recently started offering home loans to people with less than a 20% deposit again so they are either relaxed, or desperate to stimulate the market, I'm not sure which.

[EternalOptimist]

I have friends in oz on a similar gig to me, similar age etc.
its always gobsmacked me how much worse off and poorer they seemed to be.

never have been able to put my finger on it. they bang on about the weather and the lifestyle etc, but sheesh, there is something not quite right there