PHOTO: Steve and Bev Jones borrowed heavily to buy the house they wanted. ABC News: Jason Om
When it comes to household debt, Australians are world record holders.
Key points:
- Australian household debt is close to 200 per cent of income
- Most of that is tied up in mortgages
- Commonwealth Bank CEO Matt Comyn says despite the debt, there is no need for concern while interest rates remain low
“We’ve got household debt to income on just a touch under 200 per cent, and that in my view is a massive macro risk,” Gerard Minack, economist and principal at Minack Associates, told 7.30.
“Why are Australians so in debt? Because we went out and bought houses.
“Not built houses, went out and bought them and pushed the prices up to among the most expensive in the world.
“It is literally a house of cards.”
He has his fingers crossed that we do not head into recession in the next 10 years.
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