RBA misreads hidden crisis as homeowners left with bad credit for common home act

ANALYSIS Australia’s Reserve Bank could be playing a game of financial Russian roulette with homeowners, relying on a statistical blind spot that could trigger another crippling interest rate blow. The RBA announced at its latest board meeting Tuesday that interest rates would be kept on hold, but noted that future rate rises remained a possibility. “The Board will continue to do what it considers necessary to bring inflation sustainably back to target, including increasing the cash rate target further if upside risks materialise,” The RBA said. But mortgage brokers have criticised the prospect of further rate hikes, arguing the RBA had a flawed understanding of just how far it could push homeowners. One of the reasons was because many of the homeowners struggling most with their debts were not showing up in official data as defaults or arrears, even though they were no longer making repayments. Instead, hundreds of thousands were being proactive and asking their banks for emergency hardship support, which did not show up in the headline defaults figures monetary policymakers relied upon. RBA Governor Michele Bullock has kept the door open to another rate hike. Picture: John Appley...