Tuesday, 30 July 2013

Households teetering on the edge?

So Ozzie's personal finances show a high level of debt, but not to worry as it's being reduced and it's backed by investments in...housing?!

AUSTRALIAN household debt is still high by world standards, but it is not affecting the stability of the financial system. 
In 2012, the mean average debt level for Australian households was $151,488, a report from the Melbourne Institute showed. 
Commonwealth Bank senior economist Michael Workman says there are a number of factors why the high level of debt is not necessarily a problem."Some commentary on Australian household balance sheet positions conveys the impression that household debt levels are too high, leaving many households with unmanageable debt servicing commitments. 
...Australia's average debt-to-disposable income ratio, was at 147 per cent in 2012, a 28 per cent increase from 10 years earlier, the Melbourne Institute's 2012 Household Income and Labour Dynamics in Australia (HILDA) report showed.However, the average debt-to-assets ratio was a respectable 17.6 per cent, showing that most of that borrowing was high value assets like owner-occupied or investment housing (here)

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