The Pressure Is Building!

The Pressure Is Building!

How our Treasurer is wrecking the economy, making the rich richer and the poor poorer.

A year ago an investor could service a $1 million loan for about $4,500. A year later with the move to make it principal and interest - an economic foolhardy move - this individual amount is now taken up to $6,300.

Where has the difference come from? The consumers pocket! This means the consumer can't spend as normal and create normal jobs. This is why we have rising unemployment with a huge 1 in 7 workers underemployed. Not earning enough. Not paying their bills. Not able to spend and create more jobs.

The good news is, common sense will emerge and things will change. Buyers will return to the market and with fewer properties being built prices will spiral. We know that but who is prepared to take action?

Let's look at the pressure that's building!

Pressure

Westpac's monthly index on the household sentiment hit its lowest point since Winter 2016. This survey now sits at 96.2 points, well below the 100 point level that marks the equilibrium.

Well respected economist, Westpac's Bill Evans, "the component detail shows increased pressure on family finances and renewed concerns about the economic outlook is the main factor driving the fall." He continued "recent increases in mortgage interest rates and electricity costs have likely added to pressures".

To date, our Treasurer and Liberal Government have been endorsing these rate rises and the high 45% jump in repayments required by pushing investors to principal and interest.

The Treasurer's ignorance can't last forever. Common sense always comes to the fall over bureaucratic bungling and incompetent ministers. The market reasserts itself.

Why is this? The banks are wisely shielding high placed media commentators and members of parliament from the rates hike and P&I grab. This ignorance of the facts would also extend to the Treasurer.

Older heads would recall the phrase "let them eat cake".

Kevin Young // Property Club Founder

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