European money dramas and a federal budget

It’s been a big news week for finances, with the economic crisis in Greece making the world markets nervous, and within Australia, with a federal budget being announced. But will all this have much impact on our mortgages? In the first case, the answer seems to be “hopefully not”, and in the latter, the answer is more like “unfortunately not”.

Although the European Union members have agreed this week to help bail out Greece from its financial difficulties, the general consensus is that although this will have a major impact on European finances, and has made world markets fall, the whole situation will probably not change much for Australia. In fact, despite the shaky global outlook in economic matters, most experts still believe that Australia’s economy is in a strong enough position that it will avoid any downturn. The down side to that is that there will most likely continue to be more interest rate rises throughout the year, which in turn makes our mortgages more expensive, but paying more in interest is still probably a better proposition than the whole of Australia being included in the economic strife of the European Union.

In regards to the federal budget announced this week by Treasurer Wayne Swan, there wasn’t a lot in it to affect our mortgage situation. It has been described as a “sensible” budget, aiming to get Australia debt free again within a few years, which is sensible compared to the temptation of a big spending, election year budget. Experts are pleased that the budget won’t add pressure to interest rate decisions but those in the housing industry are unimpressed that there are no measures to deal with the housing shortage in Australia – that housing shortage which is pushing up costs of housing and forcing many of us to take out much larger mortgages than we comfortably want to deal with.