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1.Market Observations, 8.Was Sticky

22 May 2017 (AFR) – Interest-only loans could be ‘Australia’s sub-prime’

(22 May 2017, AFR, p1,  by:  Jonathan Shapiro, Jacob Greber)

Australian corporate and mortgage debt indexed growth rate (basis points)‘High-risk mortgage loans to young families, professionals and other over-extended borrowers amounting to more than six times household incomes could wipe out 20 per cent of the major banks’ equity base, institutional investment fund JCP Investment Partners has warned. The fund manager’s study warns that official estimates of average household indebtedness are depressed by the sizeable number of mortgages that are effectively full paid off.’

Read more at AFR.com (might need AFR login access, or try: AFR.com/trial)

(see the graph of Australian corporate and mortgage debt indexed growth rate at right – source: AFR, JCP Investment Partners)

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