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.
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.
Not a pretty picture.
One thought on “Household Debt Higher Than Ever”