By business reporter David Taylor Updated 21 Mar 2020, 3:19pm
There’s one question a lot of Australians will be asking at the moment: What if I can’t pay my mortgage? The answer in the short term is simple: for now, you’ll be OK if you’re with the big four banks. You’ll be able to keep your home.
The longer-term picture is a little murky though.
The health crisis brought on by the coronavirus pandemic is producing an unfolding financial crisis and the potential for a deep and long-lasting economic recession.
Many Australians will, rightly so, be worried about their own personal financial security. The biggest asset many Australians have is their home. It also provides us with a sense of belonging, familiarity and relative safety.
Our homes are crucial to our sense of wellbeing
Anxiety levels skyrocket, however, the moment you lose your job. That’s when you realise, depending on how much of a buffer you have, that you may struggle to meet your mortgage repayments.
AMP Capital’s chief economist, Shane Oliver, is now forecasting that “the hit to the economy from coronavirus shutdowns could be worse than anything seen in the post-World War II period”.
He also recently wrote that:
“[A deep] recession with, say, 10 per cent or more unemployment risks tripping up the underlying vulnerability of the housing market around high prices and high debt levels.”
“This could see a 20 per cent fall in [property] prices.”