tictac

Heard this term earlier on ABC Brisbane radio.

Apparently, it's a new *class* of person suffering financially as a result of the house price/inflation/interest rate fiasco.

Is my understanding correct?

Are you one of these?

bcworld

I think it refers to people who appear to have it all, i.e. nice house, nice cars, material things, good schools etc....but it has all been paid for by accumulating debt. Now they can't afford to service that debt and if they want to keep all those things they basically will have little or no disposable income.....or will be forced to liquidate 'assets'.

tictac

Thanks!

Sounds like our former neighbours in the UK

Fur coats.....

AndyR1976

Think its just another of those media-isms that they make up, but like someone else said, I suppose its people who were 'middle-class' last year (earning decent money, living in a nice house, new cars etc) who, becasue of interest rate rises, are finding that they can barely afford to eat after paying the mortgage!

The media come up with some great words though...

Vim Fuego

Ah, so, that'll be the demographic formally known as 'stupid'.

spartacus

The stats go something like this:

One third of households live in mortgaged property (one third rent, one third owns home outright).

Of the one third with morgages, approximately one third are suffering 'mortgage stress' as a result of interest rate hikes, meaning they've spread themselves a little thin. So whilst they may have the trappings of 'middle class' they have little disposable income and are reliant on debt to feed debt.

I'm sure this is not a phenomenon unique to Oz, it goes for all nations / economies. The 'middle class' have become the new 'working class' in that they have no choice but to work for a living, as oppossed to the 'non-working classes'; those who can afford not to work, and those who cannot afford to work.

Amazulu

I used to live in an affluent village in Surrey. There are loads of people there who are like you describe. Sure they earn GBP150-200k but by the time they've paid the massive mortgage, school fees, paid for the BMW or Range Rover, horses etc they actually have f**k all left and are in reality, struggling. There are some real cases of keeping up with the Joneses.

AndyR1976

Who are these Jones's anyway?????

They really have a lot to answer for in setting the bar so high!

spartacus

Yep, see it all the time.

Irrespective of how much 'working class' families earn, they have a tendency to spend it plus a little bit more, which helps to keep them 'working class'. Not a trap you'll find the 'non-working classes' falling into.

Trixy

Definition depends on who is telling the story. If you are one then you're a mortgage payer, piles credit card with petrol and food purchases and then clears credit card monthly, has second hand furniture, eats in or when eats out buy's takeaways, feels guilty if buying anything that's not life and death necessary.. oh, and drinks. Now if someone else is telling the story you're a brain-dead no hoper who dared to try and buy a house, has massive credit card debt due to irrational obsession of buying monthly plasma TVS, only pays said credit cards smallest monthly amount whilst also juggling ten other credit cards at the same time, eats out daily, buys shoes, owns a 4WD.. oh and drinks.

renth

I agree, I take no pleasure in seeing people who have over extended themselves buying in to the dream of home ownership suffering these rate hikes.

But a lot of people have released equity in their houses to buy trinkets like new cars and boats. To me that's insanity and as house prices in the UK fall and as I believe they will in Aus too people are going to find themselves in "Negative equity Maaate!"

Trixy

I don't know how much of this is like an urban myth. Persoanlly I don't know of anyone who has exchanged equity for foolish endeavours, but there must be some folk out there if it's a widely held belief.. I guess. I know of people who used joint incomes to buy a home with a huge mortgage and have become one income earners, thankfully temporarily. I'm aware too that if house prices drops they'll owe more than the house is worth. That is a sad scenario because even though they will be blamed for it, it could have so easily (at different economic times) worked the other way. They could have seen the property market reward them with a cyclical profit. Then they'd be praised for their smarts. Often people are just in the right (or wrong) place at the right or wrong time.

Kooky.

"Middle-class poor" aptly describes a lot of Singaporeans. It's all about appearances, and it's not unheard of for people to live in public housing so they can drive a Mercedes, on which they will have long, huge loans similar to mortgages. Being seen to be prosperous is very important. This is what they aspire to:

Singapore's 5 C's
* Cash
* Car
* Condo
* Credit Card
* Country Club
(Career maybe mentioned as a 6th)


tic tac is right - they're definitely fur coat and no knickers types.

tictac

I was at the Brisbane boat show last September

Now, I know Brisbane is supposedly booming at the moment, but I wondered to myself "How many Brisbanites in here are in the market for a flashy boat as a result of the rise in value of their houses over the past few years?" i.e releasing some equity.

renth

I reckon most of them, or a significant proportion.