On the positive side, households’ wage and salary income increased by more than 10 per cent over the past year, people have been finding jobs, and a large stock of additional savings was accumulated over the pandemic period.
On the other side, though, interest payments are increasing quickly at a time when inflation is also high; based on the interest rate increases that have already occurred (including yesterday’s), total required mortgage payments are expected to reach 9½ per cent of household disposable income later this year, which will be around a record high (Graph 11).