Retailers split on impact of home prices despite CEO’s denial… Homeowners giving out $4,000 in excess interest… Housing affordability impacting youth...
O'Brien dismisses concern about high home prices
Leading retailers are split over the impact of soaring house prices but agree that the retail sector needs to become more customer centric to survive increasing disruption from online and international competitors.
Woolworths chief executive Grant O'Brien has dismissed concerns that higher house prices and mortgage payments may be contributing to weak discretionary spending, saying consumers are more confident when the value of their homes is rising.
"I don't think the housing bubble is at a stage yet where it's making people stop and think about what they're going to buy in the stores," Mr O'Brien told reporters on Thursday, after stepping down as chairman of the Australian National Retailers Association, which has been renamed the Retail Council.
"People talking about the value in their homes…is part of how people get confidence," Mr O'Brien said.
"Consumers look for a few things – they look for improving value in their home, they look for good interest rates to afford a mortgage … they look for good employment numbers and if I look today I believe that unemployment has gone down again to 6 per cent, household savings are quite high, so from a consumer confidence point of view all the signals are right," he said.
Homeowners giving out $4,000 in excess interest
According to an article from Yahoo Finance, homeowners are paying on average about $4,000 in extra interest a year than they would on the best mortgage products on the market, a consumer report says.
Over the life of a 30-year, $350,000 loan, that would translate to $45,000 in extra interest paid, consumer wealth group Monetise says. People are also paying too much in fees and interest, or missing out on unearned interest, on superannuation, savings accounts, term deposits and credit cards, to the tune of about $2,000 each year, it said.
Monetise chief executive Taichi Hoshino said consumers tend to stick with what they've got when it comes to banking products, rather than hunt for better options.
"People manage to successfully change products for savings and credit cards because the switching process here is a lot easier," Mr Hoshino told AAP.
"Mortgages and term deposits are particularly sticky because the amount of money involved makes it a bigger decision, people may have fixed terms, there may be penalties for pulling short and it's a much more involved process, particularly for mortgages."
Housing affordability impacting youth
According to the article on theconversation.com, the ABS Survey of Income and Housing revealed that 168,000 or 10 per cent of home buyers spent more than 30 per cent of their gross household income on housing costs. Nearly 30 years later in 2011 these numbers had soared to 640,000, equivalent to 21 per cent of all home buyers.
The trends in housing cost burdens reflect rising real house prices. The history of house prices over this timeframe is one of booms in which real house prices escalate to higher levels than they peaked in the previous boom. Periods of house price stability punctuate these booms, and give household incomes some breathing space in which to catch up.
But at each peak in house prices, household incomes have fallen further behind. According to the same ABS data source, households in 1990 on average valued their homes at a multiple that was four times their average household income. By 2011 this multiple had climbed to nearly six times average household income.
Leading retailers are split over the impact of soaring house prices but agree that the retail sector needs to become more customer centric to survive increasing disruption from online and international competitors.
Woolworths chief executive Grant O'Brien has dismissed concerns that higher house prices and mortgage payments may be contributing to weak discretionary spending, saying consumers are more confident when the value of their homes is rising.
"I don't think the housing bubble is at a stage yet where it's making people stop and think about what they're going to buy in the stores," Mr O'Brien told reporters on Thursday, after stepping down as chairman of the Australian National Retailers Association, which has been renamed the Retail Council.
"People talking about the value in their homes…is part of how people get confidence," Mr O'Brien said.
"Consumers look for a few things – they look for improving value in their home, they look for good interest rates to afford a mortgage … they look for good employment numbers and if I look today I believe that unemployment has gone down again to 6 per cent, household savings are quite high, so from a consumer confidence point of view all the signals are right," he said.
Homeowners giving out $4,000 in excess interest
According to an article from Yahoo Finance, homeowners are paying on average about $4,000 in extra interest a year than they would on the best mortgage products on the market, a consumer report says.
Over the life of a 30-year, $350,000 loan, that would translate to $45,000 in extra interest paid, consumer wealth group Monetise says. People are also paying too much in fees and interest, or missing out on unearned interest, on superannuation, savings accounts, term deposits and credit cards, to the tune of about $2,000 each year, it said.
Monetise chief executive Taichi Hoshino said consumers tend to stick with what they've got when it comes to banking products, rather than hunt for better options.
"People manage to successfully change products for savings and credit cards because the switching process here is a lot easier," Mr Hoshino told AAP.
"Mortgages and term deposits are particularly sticky because the amount of money involved makes it a bigger decision, people may have fixed terms, there may be penalties for pulling short and it's a much more involved process, particularly for mortgages."
Housing affordability impacting youth
According to the article on theconversation.com, the ABS Survey of Income and Housing revealed that 168,000 or 10 per cent of home buyers spent more than 30 per cent of their gross household income on housing costs. Nearly 30 years later in 2011 these numbers had soared to 640,000, equivalent to 21 per cent of all home buyers.
The trends in housing cost burdens reflect rising real house prices. The history of house prices over this timeframe is one of booms in which real house prices escalate to higher levels than they peaked in the previous boom. Periods of house price stability punctuate these booms, and give household incomes some breathing space in which to catch up.
But at each peak in house prices, household incomes have fallen further behind. According to the same ABS data source, households in 1990 on average valued their homes at a multiple that was four times their average household income. By 2011 this multiple had climbed to nearly six times average household income.
