RBA’s inside notes detail Australians’ ‘harrowing’ battle with mortgage stress
An FOI request on the RBA’s internal discussions outlines concerns about the extreme lengths people are taking to make mortgage repayments, even in ‘prosperous suburbs of Sydney’.
Freedom of information requests can be tricky. This is absolutely the case when you’re looking for a glimpse at how one of the nation’s most significant economic institutions, the Reserve Bank, is wrangling with the hot button issue of mortgage stress on the back of a surge in interest rates.
One of the first FOIs I submitted at Capital Brief was on this very subject. I sought emails, reports, research, modelling or documents relating to mortgage stress between 1 May and 20 July, 2023 (the day the request was sent). This week, I got a response — and it suggests that Australians are dealing with higher levels of mortgage stress than indicated by data on mortgage arrears and distressed sales.
My choice of timeframe was deliberate. The RBA’s May and June rate rises were the last two of the latest cycle. The media was filled with stories of worried home owners critical of the central bank which, as part of its duties, is required to contribute to the "economic prosperity and welfare of the Australian people". Rates have since been on hold, at 4.1%. The board meets next Tuesday for its first rate decision since Michele Bullock became governor, taking over from Philip Lowe.
So what did the FOI deliver?
The RBA found 18 relevant documents. Seven were released with minor redactions to, understandably, remove non-senior staff names. A further nine had redactions of material deemed out of scope. And two were denied as they included untested and preliminary analysis. It’s highly likely that many other discussions were held about this subject prior to, and after, the timeframe captured in my request.
