Household Debt Higher Than Ever

The latest RBA chart pack, to December 2015 was released today. Households remain under financial pressure, as shown by the updated data relating to household debt as a percentage of household disposable income continues to move higher, and well above 175% . Whilst interest rates are low, so interest paid is on average a little above 8%, this masks significant differences across household segments, and highlights the risks to households if interest rates were to rise.

6tl-hhfin Dec 2015

We also see that income growth is as at the low-end of trend in the past 20 years, and the savings ratio continues to fall. Consequently consumption is on the low-side.

5tr-hhinconNot a pretty picture.

Author: Martin North

Martin North is the Principal of Digital Finance Analytics

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