Why we need to worry about the level of Australian household debt

From Elizabeth Knight:

The balance sheets of Australian households with a mortgage are dangerously exposed to any fall in house prices.

It isn’t just that household debt relative to disposable incomes has reached a record high of 189 per cent, it’s that households’ ability to service that debt is potentially a ticking time bomb…..

A recent Digital Finance Analytics survey found that of the 3.1 million mortgaged households, an estimated 669,000 are now experiencing mortgage stress.

“This is a 1.5 per cent rise from the previous month and maintains the trends we have observed in the past 12 months,” it found. “The rise can be traced to continued static incomes, rising costs of living, and more underemployment; whilst mortgage interest rates have risen thanks to out-of-cycle adjustments by the banks and bigger mortgages thanks to rising home prices.”

Source: Why we need to worry about the level of Australian household debt

One thought on “Why we need to worry about the level of Australian household debt

  1. […] via Why we need to worry about the level of Australian household debt — Gold, Stocks & Forex […]

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