The reason for 'population migration' into S.E. QLD??

[DougHaigh_JenMercer]

Sydney Morning Herald
Suffering in silence: a city on the edge of insolvency
Email Print Normal font Large font Linda Morris Religious Affairs Writer
November 13, 2006

ONE in three Sydney households is beset by financial worries and almost one in seven is teetering on the edge of insolvency, a church survey has found.

The study commissioned by the Wesley Mission warns financial stress is greatest in the south-west and outer west, but is also pervasive across all parts of the city, including its more affluent suburbs.

Families reported forgoing family activities, borrowing from relatives or friends, failing to pay bills on time or being unable to make minimum credit card payments.

Five per cent said they had had to pawn an item, 4 per cent said they had gone without meals and a similar number could not afford to heat their homes.

The survey of 400 people was carried out in August. Since then last week's interest rate rise - the third this year - has added $40 per month to average mortgage repayments.

The report's findings suggested household finances were extremely sensitive to interest rate rises and petrol prices as well as continued falls in the property market, which eat into capital gains. Another interest rate rise might push some families beyond their limits, the findings suggested.

The financial stress uncovered by the mission and its social researchers from Urbis Keys Young has alarmed the church's superintendent, Reverend Keith Garner, who said he was surprised at how indebted some people were.

Mr Garner said one answer was for families to live more modestly, rethink their lifestyle expectations and their Christmas spending. "We live in a competitive society that determines what we are by what we have.

"There are far too many ways you can buy something now and not pay for it for a year and suddenly one morning the bill comes in. We may need to be the first generation that sets our sights lower than the past."

The survey found four in ten households would be unable to draw on their savings or mortgage redraw facilities if faced with an unexpected expense. Almost 15 per cent of those surveyed said they would find it impossible to find an extra regular weekly payment of $40.

It revealed how people could ultimately find themselves in a vicious cycle, Mr Garner said. When faced with financial difficulties the most common response was inaction.
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Therefore .... State Governments need to be doing some mighty hard thinking about infrastructure to accomodate these shifts in population, not wait until we have "condition critical". Drought may be one factor but there are other utilities apart from water that need to be looked at closely.

[westholme]

I often wonder what all those thousands of struggling couples, such as ourselves, that got a 5 year or 3 years fixed home loan when rates were really low, are going to do when they come off those contracts. Our fixed rate is 5.9%. When we come off our contract in less than 24 months what kind of interest rates are we going to be facing? What are our monthly payments going to jump to? There would be many thousands who signed around the same time as we did that didn't go with the 5 year, instead they signed the 3 year. Those people are now coming off their contracts. Those couples must be practically having nervous breakdowns.
It is an uncertain world we live in. Especially when your state government can have so little interest in the social impact of this dam. People are trying every day to survive life.....how are they going to survive this Dam?
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CESARE LOMBROSO "The ignorant man always adores what he cannot understand"

[Marsiegen]

The reason people get fixed interest contracts is to remove the risk in the initial term. You might have got a lower variable interest contract at the time but the you would already be paying extra for the last two interest rate hikes. At least people on fixed have had a while to decide what to do.

The real problem might be that if housing prices are declining then people who bought at the house price peak possibly owe more now than they could sell their house for- if they could get a buyer. They can't sell and they can't afford the repayments- ouch.

Perhaps people should have been more careful about paying too much for a house or should have been more frugal and got a smaller cheaper house.
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"It's the right of the state to confiscate or to compensate. So where is the crime?" - Saddam Hussein