We can see in various data sets that there are a few signs of citizens who are finding it tough.
We can look at big bank loan arrears older than 90 days rising, such as what Commonwealth Bank of Australia (ASX: CBA) recently reported. We can look at the country's declining household saving's ratio.
ABC just did a piece on how record numbers of Australians are facing financial difficulty.
The report said that the Federal Government service, the National Debt Helpline, is on track to get a record number of calls this year, a lot of them are from older Australians who can't meet mortgage or rent payments.
Karen Cox from Financial Rights Legal Centre said "Call volumes are huge" and the helpline is now starting to receive calls about Aussies who are finding it difficult to change from interest-only payments to principal & interest payments.
Salvation Army's financial counselling service, Moneycare, reported an 18% increase in Aussies seeking help in FY18 and there has been a large increase in people over 55 who need help with debt of more than six times a person's annual disposable income. There has been a 37% increase of older callers over the past decade. Considering the GFC was a decade ago, that's quite a stat.
What does it mean?
It may not mean anything. Sadly there are always people in financial difficulty. And the number of people in financial difficulty won't be exactly the same percentage every year.
However, it seems that there has been quite a material rise in hardship. It could be logical to assume that people call debt helplines before becoming forced property sellers.
Fire sales aren't good, but if they've owned the property for a number of years then they should have experienced pleasing capital growth.
It appears that things could get a bit worse for the economy and the property market before they get better if the underlying household financial difficulties don't improve.
I don't want to own shares of CBA, Australia and New Zealand Banking Group (ASX: ANZ), Westpac Banking Group (ASX: WBC) or National Australia Bank Ltd (ASX: NAB) at this stage that's for sure.
