A growing number of Australians are bracing for financial heartache, with a new survey finding 47% of property investors and one third of homeowners could be forced to sell up if interest rates increase by 1%.
It’s a grim finding, coming a day after economists at ANZ predicted interest rates will rise by 0.5% before the end of 2008, with the bank tipping that a 0.25% rise will happen as early as August.
If ANZ is right and the banks continue to raise rates beyond the RBA’s official cash rate increases, the doomsday scenario of rates climbing by a further 1% could eventuate late this year or early next.
The survey of 2331 people by research firm Coredata also found that 76% of respondents are finding mortgage repayments more difficult after seven official interest rate rises in two years, and around 20% of borrowers are using more than half of their total household income on home loan repayments.
One in five respondents say they were running into debt to run their households and 67% claimed their financial situation is worse now than 12 months ago – an increase of 21% from November 2007.
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