SYDNEY - 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.
"It's a real time bomb," said Professor Richard Holden, an economist at University of New South Wales.About 1.3 million Australians have applied for the Covid jobless benefit, called JobSeeker, according to government figures, while economists estimate at least another six million people - a quarter of the population - are having their wages subsidised by a separate relief package for shuttered companies.
"If you've got desperate sellers or forced sales, it could have a depressing effect on prices. That is the big risk: Do keep deferring? Someone's got to pay for this." "The test is going to be how effectively we can make the orderly transition away from repayment deferrals," he added. For now, house prices have stayed relatively unaffected, with nationwide prices down a total of about 1 per cent through May and June, although still up nearly 8 per cent from a year earlier, according to property consultant CoreLogic.