Some Australians will be forced to give up their homes as a result of the lockdowns that have now engulfed half the nation.
As NSW, Victoria and South Australia scramble to contain the Delta outbreaks in their respective states, banks have reinstated mortgage holidays in a bid to help struggling business owners and home owners.
But this won’t help everyone, according to a big four bank boss.
“There will be some situations where [for] customers, it’s the best thing for them to do to put the house on the market if they themselves don’t see themselves getting back into employment for a long period of time,” NAB CEO Ross McEwan told ABC.
So far, NAB has not had to foreclose on any properties across the last 14 months, he said.
“Our intention is to keep homeowners in their homes as much as we possibly can and work with them, and we want to get people through this,” said McEwan.
“This is not their fault.”
With lockdowns being extended in both NSW and Victoria, NAB has seen a 40 per cent increase in the volume of customers ringing in for assistance, with their biggest concerns around mortgage repayments as well as credit cards or personal loans.
“Let’s be quite clear: this hurts,” McEwan said, urging people to contact the bank if they needed help.
“That’s why we want people to call us early so that we can intervene with them and put in place some sort of arrangements.”
Economists have warned of a rising likelihood that half the nation in lockdown will see Australia’s economy cop a ‘double dip’ recession, the second in as many years.
But NAB’s chief is optimistic the slide in economic growth won’t last long.
“We certainly look like we will be going back into negative territory, but what we have seen after each of those lockdowns the opening-up does bring economic activity back very, very quickly,” said McEwan.
But if the outbreaks aren’t contained soon, the hit to jobs will take longer to recover.
“We’re still seeing unemployment at a very low level, 4.9 per cent; by the end of this year, we’ll be around 4.8 [per cent]. But that won’t be the case with more severe lockdowns.”
The Reserve Bank of Australia has indicated it won’t be lifting record-low interest rate for years, until wages growth and inflation have both comfortably and sustainably hit their target.
Before the latest lockdowns, there was some speculation that the RBA would hike rates earlier than expected.