Given the recent data, no surprise the latest RBA chart pack includes the updated household finances data to December 2016, and shows a further rise in the debt to disposable income ratio. Given that lending growth is around 6.5% over the past year and income growth much lower, this trend is likely to continue.
However, the debt has to be repaid at some point. Also worth noting that the interest paid now reflects the lower effective interest rates following the RBA cash rate cut. However, we expect effective rates to rise in coming months.
