The major bank has questioned whether the growing difference between credit growth and wage growth will ever reach parity.
A weekly update from ANZ Research on Friday (3 November) noted that as Sydney house prices begin to fall, building approvals are trending up and annual growth in housing credit remains above 6 per cent.
“While this growth in housing credit is well below the average pace of the past 20 years, it is still above income growth,” the bank said.
“Indeed, the gap between the two has widened this year despite the implementation of more macro-prudential policy. This leads us to consider whether the gap between the two can be closed, with interest rates as low as they are.”
Recent analysis from Digital Finance Analytics (DFA) found that net incomes are not covering the ongoing costs for close to 30 per cent (up from 25 per cent in May) of Australian households.
DFA’s October 2017 Mortgage Stress and Default Analysis update, released last week, found that across Australia, more than 910,000 households are estimated to be now in mortgage stress and more than 21,000 of these in severe stress, up by 3,000 from last month.
“This equates to 29.2 per cent of households,” DFA principal Martin North said. “We see continued default pressure building in Western Australia, as well as among more affluent household, beyond the traditional mortgage belts across the country.
“We estimate that more than 52,000 households risk 30-day default in the next 12 months, up [by] 3,000 from last month. We expect bank portfolio losses to be around 2.8 basis points ahead, though with losses in WA rising to 4.9 basis points.”