Half a million households spared by JobKeeper, JobSeeker, Coronavirus supplement

author-avatar By on November 26, 2020
Half a million households spared by JobKeeper, JobSeeker, Coronavirus supplement

Almost half a million Australian households have been spared from falling into housing affordability stress thanks to JobKeeper, JobSeeker and the Coronavirus supplement.

But once government support is withdrawn, 124,000 households could end up in stress according to new economic modelling undertaken for the Australian Housing and Urban Research Institute (AHURI) by researchers from the University of Adelaide and Curtin University.

The research found the implications of large-scale job losses on households' ability to meet housing costs would have been 'devastating' if it weren't for JobKeeper, JobSeeker and Coronavirus supplement interventions.

The economic modelling found that total unemployment could be between 1 million to 1.752 million Australians (8.7% - 15.1%) in 2021.

The unemployment rate currently stands at 7% according to ABS figures.

Buying a home or looking to refinance? The table below features home loans with some of the lowest variable interest rates on the market for owner occupiers.

Lender
Advertised rate Comparison rate Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval
VariableMore details
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
VariableMore details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
VariableMore details
YOU COULD WIN $100k TO PAY DOWN YOUR LOAN*

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • For a chance to win $100K towards your home loan, apply with Athena before Oct 31 & be approved by Dec 15
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
YOU COULD WIN $100k TO PAY DOWN YOUR LOAN*

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • For a chance to win $100K towards your home loan, apply with Athena before Oct 31 & be approved by Dec 15
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
VariableMore details
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^

Rates correct as of October 19, 2021. View disclaimer.

Lead author Professor Chris Leishman said the analysis has shown just how crucial COVID-19 support measures have been.

“Without government intervention, Australian households in housing affordability stress would have nearly doubled, from 757,000 at the baseline to more than 1.36 million, even after Commonwealth Rent Assistance (CRA) had been taken into account,” Professor Leishman said.

“The modelling reveals that some 103,500 households entered situations of housing affordability stress as a result of the pandemic. The policy concern is that if these highly successful government interventions are withdrawn prematurely, almost a third of those saved from suffering housing affordability stress will now experience it.

“Without an extension of the JobKeeper income support measures beyond March 2021, the number of households living in HAS is likely to increase significantly, to at least 793,000, and could reach as high as 893,000."

See also: How many jobs did JobKeeper keep? 

Housing affordability stress is commonly defined as when a household  is spending more than 30% of their income on rent or mortgage repayments.

The research also modelled a hypothetical phase four of JobKeeper (reduced to $650 per fortnight) which it claimed would halve the number of households living in housing affordability stress when coupled with CRA and a national 25% rent relief scheme. On its own, the hypothetical phase four could keep the number of households living in financial stress below baseline figures.

“Our research shows that the number of households living in a precarious employment and housing affordability situation is already very high,” Professor Leishman said.

“The 2021 scenario modelling shows that CRA is not sufficient to fully mitigate the impacts of an economic downturn in any of the scenarios we examined. The COVID-19 pandemic has had a disproportionate impact on younger workers, and those working in less secure public-facing occupations. Lower-income workers and private renters are also disproportionately affected.

“Serious consideration should be given to the development of further support measures that would benefit these households.”

The research also modelled a range of unemployment scenarios by industry.

Under a worst case scenario, job losses in accommodation and food services, which have been hit hard by the pandemic, could be as high as 31.8%.

Need somewhere to store cash and earn interest? The table below features savings accounts with some of the highest non-introductory and introductory interest rates on the market.


Photo by Annie Spratt on Unsplash

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2020. They are (in descending order): Great Southern Bank, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
  • If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and Savings.com.au

Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.

In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

Latest Articles

author-avatar
Emma Duffy is Assistant Editor at Your Mortgage and  Your Investment Property Mag, which are part of the Savings Media Group. In this role, she manages a team of journalists and expert contributors committed to keeping readers informed about the latest home loan and finance news and trends, as well as providing in-depth property guides. She is also a finance journalist at Savings.com.au which she joined shortly after its launch in early 2019. Emma has a Bachelor in Journalism and has been published in several other publications and been featured on radio.

Be Savings smart.
Subscribe for free money newsletters.

By subscribing you agree to the Savings Privacy Policy