Record low interest rates take effect
FINANCIAL conditions are improving for homeowners, but worsening for Gen Y. The September St George-Melbourne Institute Household Financial Conditions Report released last week reveals that Australian home owners are enjoying the biggest improvement in financial conditions in more than a year, signalling lower interest rates are now taking effect in the economy.
The index increased by 1.1 per cent in September to 127.1, representing the third straight increase and the longest run of improvements since December 2009. But while lower interest rates are spurring improvement in the financial conditions of households, Australia’s youth (aged 18-24) and seniors (aged 65 and over) who are less likely to have a mortgage, have seen a decrease in their financial conditions. The index of financial conditions for 18-24 year olds fell 21.3 per cent in September - the biggest fall in six years.