With interest rates predicted to rise as many as eight times in the next two years, charitable organisations fear many Wagga households will no longer be able to pay essential bills.
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Writing for the Lowy Institute’s website, former Reserve Bank of Australia board member John Edwards has predicted rates will rise.
Elsewhere, expensive property markets, soaring levels of household debt and predatory lending practices are being flagged by economic experts, who are warning that thousands of Australian households are on the verge of mortgage stress.
Centacare chief executive Paul Jensen believes a great many Wagga families could face mortgage stress if interest rates start to rise.
“I think it will be unlike anything we have seen for some time,” Mr Jensen said.
“We currently have historically-low interest rates and some of the highest housing prices. Only a slight adjustment is going to have pressure mounting on families.
“Discretionary spending is being reduced and many families are finding it harder to even cover non-discretionary essential spending.
“It is quite daunting. People are struggling,” he said.
Mr Jensen, who has worked in Wagga for four years, said he has noticed an increasing problem in the community with homelessness.
“In Wagga, there is a definite rise in the number of people who are sleeping rough,” he said.
Wagga St Vincent de Paul executive officer Mike Riley has also noticed an increase in the number of the city’s residents who were seeking help to cover essential bills.
Mr Riley said he had noticed not only an increase in the number of residents who needed help with energy bills, but also in people who had been able to pay these bills, only to find they did not have enough money left to cover the cost of food or a rent or mortgage payment.
In the period from April to August, 2016, St Vincent de Paul in Wagga handed out $58,289 in vouchers to people to pay their energy bills. In 2017, for the same April-August period, the figure has risen to $69,790.
Assistance with rent has risen from $22,500 last year to a current figure of $24,199, while help with phone costs has grown slightly from $7268 last year to this year’s $7900.
“Winter is always a challenge and this winter we have definitely noticed an increase in the level of help needed with energy bills,” Mr Riley said.
