One of Anthony Albanese’s most senior ministers has issued a grim warning about mortgage stress in ‘s most unaffordable cities.
Unemployment in January rose from 3.9 per cent to a two-year high of 4.1 per cent as just 500 new jobs were created during the month.
Treasurer Jim Chalmers blamed higher interest rates, after the Reserve Bank in November raised the cash rate for the 13th time in 18 months to a 12-year high of 4.35 per cent.
‘This is also the inevitable consequence of higher interest rates and persistent inflation and global economic uncertainty,’ he said.
One of Anthony Albanese ‘s most senior ministers has issued a warning about mortgage stress with Treasurer Jim Chalmers (left) pointing out
Dr Chalmers also issued a warning about borrowers in cities like Sydney, where the median house price is $1.395million.
‘First of all, it’s not uncommon for the composition of a a slowing economy to look different in different parts of ,’ he said.
‘Certainly, those parts of which are more exposed to mortgage pressures feel the pain disproportionately when interest rates go up.’
When Labor came to power in May 2022, the banks were offering variable rates starting with a ‘two’ but they have since climbed well above six per cent, leading to a 69 per cent surge in monthly mortgage repayments.
Borrowers with an average, $600,000 mortgage have seen their repayments climb from $2,300 to $3,900.
But in New South Wales, the average new loan is $785,405, which means someone with a 20 per cent deposit would be paying off a $981,756 home.
Dr Chalmers blamed higher interest rates for a rise in ‘s unemployment rate
That means borrowers in Sydney’s outer south-west, in places like Liverpool, would have seen their monthly repayments climb from $3,000 to $5,100.
NSW also had ‘s second biggest unemployment rise, with the jobless level increasing from 3.4 per cent in December to 4.1 per cent in January.
Tasmania’s jobless rate surged to 4.5 per cent, up from 3.6 per cent, in a state where incomes are lower than the rest of .
Credit ratings agency Moody’s Analytics is particularly worried, with economist Sarah Tan predicting high immigration would no longer result in strong employment growth.
‘Cracks are emerging in the Aussie labour market,’ she said.
Borrowers have, since May 2022, copped a 69 per cent surge in their monthly mortgage repayments, hitting areas in south-west Sydney where homes typically cost close to $1million (stock image)
‘We expect employment to make gains in 2024.
‘However, a rising population is likely to outweigh those gains, resulting in a higher unemployment rate.
‘We expect the unemployment rate to reach 4.5 per cent by the end of 2024.’
Should that prediction materialise, would have 666,086 unemployed people in a labour force of 14.8million.
The number of unemployed grew by 22,300 in January to 600,600, the Bureau of Statistics figures released on Thursday showed.
‘s net overseas migration level hit a record-high of 518,000 in 2022-23, covering the year to June.
It slowed to 447,790 in the year to December but this was still double the pre-pandemic level of 194,400.