Rates a threat as household debt balloons
The number of Australian households expending more than half their income on servicing debt increased by 50 per cent in the September quarter, the ING/Melbourne Institute savings survey has revealed. Almost 8 per cent of households now use more than half their income to service debt compared with 5.1 per cent the year before. Most of the debt is in property.
A total of 33.9 per cent of Australians now have a mortgage, up 3 percent in two years while household debt has increased to nearly 130 per cent of disposable income. AMP Henderson Global Investors says that a rise of just 1 per cent would return consumers' interest payment-to-income ratios to the level seen just prior to the early 1990s' recession.