What if rates double?

The $1.2 trillion of household deposits held in Australian banks doesn’t seem like it could move the needle, should all be deployed into the Australian residential real estate market, which has a cumulative value of approx. $8 trillion.

This assumption means all of the deposits are spent and leaving none for a rainy day, and what if a further $1 trillion is borrowed…..

then $2 trillion (in this sudden and assumed acquisition wave) could make an impact although Australia(ns) rank perilously high amongst the global rankings of;

a) personal household debt as a percentage of disposable income and

b) personal household debt versus GDP.

So, then……what if mortgage interest rates double from 2% to 4%?

May 5, 2021

by Rob Zdravevski

rob@karriasset.com.au