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2-Sense: Mortgage monster swallowing households, student migration and investor exodus

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Welcome to the latest edition of 2 Sense on the Australian Property Podcast, where we break down the biggest news headlines of the week and tell you what this really means for you.

Mortgage Broker Chris Bates and Buyer’s Agent Pete Wargent discuss mortgages swallowing 1/5 of households, overseas students driving migration, and investor exodus in Sydney and Melbourne. 

Story 1: Mortgage monster swallows 1 in 5 households

  • The cash rate target has gone to 4.1%, and may even rise further and repayments exceed incomes in some households 
  • Why? Overstretched? Over-leveraged borrowers? Other costs of living have soared
  • What next? Unemployment up? Arrears up? Defaults? Forced selling?

Story 2: Indian Students migrating to Australia and Canada

  • Population growth is at record highs – a huge driver is the return of international students
  • India is taking over from China and is a key driver of population growth
  • India is a different economy from China, and won’t need as much of our minerals 
  • SQM reports that rental vacancies are going to hit all-time lows in October 
  • What next? Population growth should normalise once student figures normalise

Story 3: Investor exodus gathers steam in Melbourne and Sydney

  • More stock listings are accounted for by investors selling off
  • Where? Mainly Melbourne especially inner Melbourne 
  • Why? Cashflow sensitive, offloading underperforming assets (and Melbourne units have been)
  • What next? Investor financing is actually also rising, so it’s a tug of war in both directions. New listings are up, but are being absorbed too.

 

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