People are really struggling out there

Last month’s figures showed 120,000 Australian homeowners are now in negative equity on their mortgages, after nine straight interest rate rises by the RBA.

Another 289,125 homeowners, who bought between November 2021 and April 2022 when house prices were booming, are also right on the edge of going underwater.

Many households are experiencing serious cash-flow difficulties, which means they’re struggling to pay the interest on their mortgage each month.

If the RBA continues to lift rates and predictions of a 20 to 30 percent fall in property prices comes true, then that 120,000 will be just a drop in the bucket of what’s coming.

We could be looking at 500,000 households or more, in negative territory by the end of 2023.

Then it will simply be a question of how long people can keep servicing their debt each month, before they are forced to sell.

Either way, there’s more distress to come and, sadly, many people will struggle in 2023.