The author has been described by News Ltd as an "iconoclast", "Svengali", a pollie's "economist muse", and "pungently accurate". Fairfax says he is a "Renaissance man" and "one of Australia’s most respected analysts." Stephen Koukoulas concludes that he is "85% right", and "would make a great Opposition leader." Terry McCrann claims the author thinks "‘nuance’ is a trendy village in the south of France", but can be "scintillating" when he thinks "clearly". The ACTU reckons he’s "an enigma wrapped in a Bloomberg terminal, wrapped in some apparently well-honed abs."

Thursday, May 26, 2011

What share of their disposable income do Aussies dedicate to servicing their home loans (chart)?

Based on the latest HILDA survey data, which has been helpfully interrogated by the RBA, the median disposable-income-to-mortgage principal & interest repayment ratio (DSR) in Australia was just 21% in 2009. This represented a fall from 26% in 2008 (noting that home loan rates peaked at 9.6% in August of that year). Also recall that when the RBA cut rates in the second half of 2008, most borrowers on variable rate loans did not avail themselves of the reduced repayments (because they kept paying off their loans using the old amortisation schedules). The share of home loan borrowers who reported that they were "ahead of schedule" in their repayments also rose to an impressive 58% in 2009 from 51% in the 2008 survey. Check out the chart below.