FILE PHOTO: Commonwealth Bank
SYDNEY (Reuters) – Nearly 20,000 Commonwealth Bank of Australia mortgages are held by people receiving jobless benefits due to COVID-19, raising concerns for the economy of possible forced property sales and sharp house price declines once support runs out.
The data, released by the country’s biggest bank along with its annual profit announcement on Wednesday, shows Australia’s A$7.2 trillion housing market is being propped up by temporary relief payments for people left jobless by shutdowns to stop the virus spreading.
That raises the risk of a sharp downturn in house prices when the payments stop and banks call in loans they deferred for coronavirus-impacted borrowers. Already the Australian government has extended a COVID jobless benefit by three months to December, at a reduced rate.
“It’s a real timebomb,” said Richard Holden, an economics professor at University of New South Wales.
“One of the tricky things for the banks is how aggressive they’re going to be in enforcing loans.”
READ MORE VIA WHTC
