So you’re sitting in your hairdresser’s chair and the talk turns to and the high cost of housing.

“What you need is to switch your mortgages,” says your barber cheerily. “I’ve heard of one lender that’s offering loads at 2% below average…”

Yes – mortgage brokers are tempting hairdressers with high commissioners to sell their loans. According to The Financial Review this week, they pay 0.56% of the loan for a qualified lead – or $560 per $100,000. Big bucks, given an average house price of more than a million.

It’s all part of the desperation felt by finance providers because we are all getting poorer, and harder to persuade into debt.

Surging prices of household items like energy are driving inflation up – 2.1% in the last quarter. But household income growth has dived to 1.9%.

House prices went up 6.4% – meaning the average family with two incomes has to pay 27.6% of salaries on their mortgage.

Small wonder the debate this week has been all about “good debt” and “bad debt”.  

The difference to the Federal Treasurer Scott Morrison, preparing his Budget speech for May 9, is important. One has a return (business loans, for instance).  And one doesn’t (welfare and Medicare payments).

But if you are an ordinary family, there is really only bad debt. Especially today.  

Economists largely agree rising prices have been strong enough for the Reserve Bank of Australia to take interest rate cuts off the table next week.

CBA economist Michael Blythe says: ‘‘ Rising petrol prices, up 12.9 per cent over the past two quarters, are now having a negative impact on consumer spending power. In fact spending on areas that are largely outside consumer discretion , such as fuel, health, insurance , utilities etc., is on the rise, up 1.6 per cent in the quarter and 4.2 per cent over the past year,’’ he said.

Economists were this week brave enough to call the top of the housing market.

Clearance rates in Sydney and Melbourne fell back into the mid-70 per cent range over the weekend – Sydney saw its lowest clearance rate for the year – after weeks of results above 80 per cent.

Investment bank UBS published a 69-chart deep-dive analysis and said it was now “ringing the bell” and “calling the top” for both activity and house price growth.

“While the historical trigger for a housing downturn [of RBA hikes] is missing, mortgage rates are rising, and sentiment of home buying collapsed to a record low,” UBS’ economists Scott Haslem, George Tharenou and Jim Xu said in a note to clients.

“Looking ahead, price growth has likely now peaked, and we see a moderation ahead amid record supply and poor housing affordability. We are ‘calling the top’, but stick to our forecasts for commencements to  ‘correct but not collapse’.”

True or false?  We’re not sure.

But we are obviously not too poor. One of the fastest growing sectors in the business economy is the meal kit delivery sector, it was reported this week.  It’s worth $600 million and growing and the two players  – Hellofresh and Marley Spoon are slugging it out for the burgeoning market for meal delivery.  

They leave boxes of ingredients and meal menus at your door. Saving you the trouble of going to the supermarket and buying your own.

So first world!

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