- June 7, 2023
- Posted by: mararting
- Category: Interest Rates
An Australian property investor is facing ridicule after sharing his difficulties in managing two mortgages amidst rising interest rates, receiving little sympathy in return.
Brendan Addison, a construction project manager based in Sydney, drew backlash online after complaining about his struggle to keep up with mortgage repayments for his investment property.
In an interview with the Australian Financial Review on Tuesday, Addison expressed the need to seek additional work to meet the mortgage payments for both his primary residence and the recently purchased investment property.
He voiced concerns that if interest rates continued to rise, the situation would become “really terrifying,” particularly since his single-income household was already not generating enough income from the investment property to cover the mortgage repayments.
“I don’t want to lose my investment because I’m hoping to hold on to it for the next 10 years, but it’s getting really tough. I mean, where would interest rates stop rising?” Addison stated.
However, his story received little sympathy online, with many labeling him as “out of touch” and undeserving of sympathy given the current economic climate.
One commenter wrote, “This guy has two mortgages. Surely he knew that rates might just increase? It’s the battlers with a single mortgage on the family home we should be worried about.”
Property research analyst Cameron Kusher also questioned why Addison didn’t consider selling his investment property, joining others who expressed the same sentiment.
Further comments on the publication’s Facebook and Twitter post have been restricted.
Earlier this week, renowned finance expert Scott Pape, known as the “Barefoot Investor,” urged Australians to confront the financial decisions they have been avoiding.
Pape suggested options such as selling underperforming investment properties or downsizing from current residences in a list of examples.
He emphasized the need for individuals to stop making excuses and take action.
On Tuesday, the Reserve Bank of Australia raised the cash rate for the 12th consecutive time since May of the previous year, marking the highest level in 11 years.
The rate increased by 25 basis points, reaching 4.10 percent.
Treasurer Jim Chalmers acknowledged that many Australians would find the decision “difficult to understand and difficult to cop.”
Reserve Bank Governor Philip Lowe warned Australians to prepare for further rate hikes, acknowledging the financial squeeze many are experiencing.
While conceding that inflation had peaked, Lowe stated that the current rate of 7 percent was still well above the central bank’s target range of 2-3 percent.
He explained that the additional rate increase aimed to instill greater confidence in achieving the inflation target within a reasonable timeframe.