IMF concerned about household debt

The International Monetary Fund has highlighted the housing sector as a weak point in the Australian economy. In a report last week the IMF noted that mortgages were equivalent to 160 per cent of household income and interest costs were at 12 per cent. The fund said “There are a number of potential risks, including heavy exposure of banks to highly indebted households, which warrant close monitoring of household finances”. The Reserve Bank of Australia has a different point of view saying that the greatest level of debt is held by those best able to bear it and that the financial assets are more then three times larger than household debt.