Are you suffering from mortgage stress? Terry Ryder

Are you suffering from mortgage stress? Terry Ryder
Are you suffering from mortgage stress? Terry Ryder

Someone with lots of time on their hands and not much to do has decided I’m a stressed person.

I should probably seek professional help because not only am I stressed but, alarmingly, I don’t know it. I’m never felt more relaxed in my life, but the aficionados has declared me stressed and these people are experts. Clearly I have a serious disorder.

But it gets worse. Apparently Australia is chock full of people just like me - stressed to the max, but don’t know it. We’re delusional apparently.

We’re all suffering from a new 21st Century disorder known as mortgage stress. The symptoms are a high standard of living, a quality home, an ability to pay all your bills, holidays overseas, happy kids and 30% of your income spent on your mortgage.

It’s a national issue because we don’t know it’s serious. We should all be in therapy but most of us aren’t. Someone should bring on a parliamentary inquiry. 

Sorry, I forgot, they already have. We already have an politicians inquiry into affordability, following close on the heels of the previous 18-month investigation that found nothing of value.

Here’s how it works. One of those pointless businesses that compare home loans and interest rate deals has decided to drum up a bit of publicity in a competitive industry.

They know the key to success is to publish something sensationally negative and they know media is obsessive-compulsive over the whole issue of house prices and affordability.

So they’ve invented something called mortgage stress. They’ve arrogantly decided on a benchmark based on nothing other their desire for media profile. 

So they’ve come up with garbage like this: “On average many owners in capital cities are on the tipping point of mortgage stress, committing 29% of their income to cover repayments. When owners use 30% of their income to repay their loans they are considered to be in mortgage stress.”

Really? According to which experts? Who has pronounced 30% to be the point at which we all fall into stress?

The answer is someone who writes press releases for a loan comparison outfit. It’s the quintessential case of lies, damned lies and statistics.

With the latest findings of this pointless exercise, you could actually come up with something spectacularly positive. Because the latest “research” indicates that Sydney residents with mortgages are NOT mortgage stressed. On average, Sydneysiders with mortgages spend only 26% of income on their mortgages payments. 

After all the hysteria about Sydney prices and the so-called affordability crisis, Sydney households are actually very comfortable with their home loans. Isn’t that extraordinary?

Melbourne also is a city bereft of mortgage stress, with the typical household paying only 28% of income on the mortgage. Perth is very comfortable also. And across Australia, the average household is below the arbitrary red line of 30%.

That’s worth a headline, I would have thought, assuming you believe these figures have any relevance at all.

But the press release writer has buried this deep down the bottom of the media statement, because it’s a rather inconvenient fact. It doesn’t fit the objective of a sensationally negative finding.

The spokesperson for the pointless organisation (which will remain nameless because they don’t deserve the publicity) has declared the results “a bit worrying”.

“It’s alarming that so many Australians are over-stretching themselves and first home buyers and those buying with others are the worst off,’’ she said.

Actually, it’s not alarming at all. It’s quite the opposite. According to their figures, the residents of our largest and most expensive cities are not mortgage-stressed at all. And the average Australian is below the manufactured stress level.

So what did media do? Naturally they published the “findings” pretty much verbatim from the press release, breathlessly declaring a crisis.

Another addition to the great seething mass of misinformation about Australia real estate.

In my perfect world, publishing this kind of dishonest, fabricated-crisis nonsense would be a criminal offence. I see it as a form of fraud.

 

TERRY RYDER is the founder of hotspotting.com.au. You can email him or follow him on Twitter. 

Terry was recently joined by Property Observer editor at large Jonathan Chancellor for a webinar on why research is the key to successful property investing in 2015. You can download slides and audio from the webinar here.

Terry Ryder

Terry Ryder

Terry Ryder is the founder of hotspotting.com.au.

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