Boss of ANZ issues a terrifying warning that every Aussie needs to read – and makes a staggering admission about what’s happening to our once lucky country

The head of one of Australia’s biggest banks has declared that home ownership is now the ‘domain of the rich’, thanks to low housing supply and rising interest rates.

ANZ boss Shayne Elliot said it was currently the toughest environment to get approved for a home loan in three decades, due to high mortgage repayments and tighter lending regulations.

His comments follow former federal treasurer and outgoing Future Fund chairman Peter Costello warning that Australia’s record high migration was weighing on the rental market and adding to the Reserve Bank’s battle to reduce inflation.

“If you want a loan, you have to be better off, and essentially rich,” Elliott said The Australian.

“There are big social and political consequences… Is that a society we want, where people can’t get a mortgage or get a loan to start a business?”

ANZ boss Shayne Elliot said owning a home in Australia is now the domain of the wealthy

According to data from the Bureau of Statistics, the average Australian mortgage has risen over the past decade from about $350,000 in 2013 to $598,867 this year.

This increase did not deter first home buyers from entering the market, while interest rates were less than 1 percent. But after thirteen interest rate increases in eighteen months, the monthly repayments are now astronomical.

According to data from Canstar, the average mortgage bill was $2,570 in April 2022, but that has now risen to $4,151, with an interest rate now at 4.35 percent.

Mr Costello said problems in the housing market were not limited to those looking to buy a home, but renters were also feeling the pressure.

He pointed to Australia’s record migration figures – more than 500,000 people in the 12 months to September – putting pressure on the already tense rental market.

“Australia has always been a migrant country and I have always supported immigration. But immigration levels are now extremely high,” Costello told a conference in Sydney this week.

He said it was “no wonder” there were rental shortages.

Acting RBA Assistant Governor (Economic) Marion Kohler said inflation was proving difficult to tame.

She said the recent spike in oil prices has served as a “timely reminder” that supply shocks could compound the challenge of bringing inflation back to target.

Also speaking at the UBS Australasia Conference in Sydney, Dr Kohler said the broader economy is developing ‘more or less as we expected a year ago’.

Economic growth slowed, the labor market eased and headline inflation fell, driven by moderation in commodity prices as supply chain issues were resolved.

But she added: “Inflation is still too high and underlying inflation is higher than expected a year ago.”

“Prices for many services have risen rapidly in Australia,” she said, noting that service price inflation has slowly fallen in many other economies.

Petrol prices are soaring, increasing pressure on households and making it harder for the RBA to fight inflation

Higher grocery prices and skyrocketing electricity bills are also contributing to rising mortgage payments

Treasurer Jim Chalmers said inflation remains his primary concern but is “not our only challenge.”

“Central banks and budgets are focused on demand management, but it is on the supply side where we can lift the speed limits of our economies in the medium term,” he said in his opening remarks at the meeting of APEC economic ministers in the United States this year. week.

He said it is important to reorient economies to take into account key trends such as the transition to a low-carbon economy and the aging of the population.

Payments data from the Commonwealth Bank showed spending fell sharply in October after a wave of major events such as the FIFA Women’s World Cup kept spending high for the previous three months.

October’s one percent decline followed three months of monthly improvements, with the annual growth rate also falling.

Recreation, as mapped by the CommBank Household Spending Insights index – which covers roughly 30 percent of consumer transactions – fell 4.7 percent over the month, while hospitality also recorded a sharp decline of 4.5 percent.

“People may have exhausted their desire to go to these big events and until the next big event happens, things are looking a bit soft,” said CBA chief economist Stephen Halmarick.

He said higher interest rates were clearly weighing on households, as were rising prices for essentials such as utilities, transport, education, healthcare and insurance.

Discretionary spending fell 3.7 percent, while essential spending rose 0.3 percent.

“The spending being increased is really about higher prices, and people having to spend more money on things that they might not necessarily like to spend more money on,” Mr Halmarick said.