After pinching gold last quarter and taking the mantle of the world’s most indebted households, Australia has slipped back to third place according to the latest data from the Bank for International Settlements (BIS), courtesy of data revisions.
The next table shows the ratios of household debt to GDP as at the June quarter of 2016. As you can see, Switzerland (128%) and Denmark (124%) has taken gold and silver, with Australia taking bronze (123%). The Netherlands (111%) and Canada (100%) round out the top five:
The below chart tracks these ratios across the Anglosphere, with Australia way out in front with a ratio that is also well above Ireland’s at its peak (117.5%):
Now get back to paying-off that mega-mortgage!
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
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Pardon my pig ignorance, but why are die schweiz and danemark so indebted? They got housing bubbles with beautiful Reusas too?
I believe it’s all mortgage related, yes. Certainly in my home country where the previously shown to be unsustainable housing market has once again exploded into a nice and frothy bubblefest. Amsterdam is up 22% in a year, although it is fortunately a bit of an outlier as it is grappling with foreign investors like Australia is, unlike other cities in The NL.
Super low interest rates + mortgage interest tax-deductable for owner-occupied homes = massive debt and high house prices.
That said, house prices are still lowish compared to Australia’s and mortgages are much more affordable (no, serviceable for now) due to the distortions.
This family in Danmark is even getting paid to have a mortgage on their USD 216,000 home:
http://www.wsj.com/articles/the-upside-down-world-of-negative-interest-rates-1460643111
A new Dutch Disease?
http://www.privatedebtproject.org/view-articles.php?A-New-Dutch-Disease-Private-Debt-in-the-Netherlands-22
Thank you AnonNL, much appreciated!
With negative interest rates in Denmark, some of that debt is really an asset. Therefore Australia must be silver!
Clearly we need a Royal Commission into the performance of our National Institutes of Debt (RBA and APRA) and find out why our Debt athletes are starting to under perform.
When former National Coach – Glenn “stuff it till they choke” retired, everything was sweet and we were champions of the world.
There is no time to waste.
This kind of slipping in the international rankings can quickly lead to kids not wanting to become debt serfs and do something else with their lives.
well looks like someone picked on this already. RE clearance rates are booming again – shooting for gold this time around.
June quarter data? lol old news
The RBA cut in May and Aug
No FIRB prosecutions
No AML/CTF legislation
No NG reform
In the last 14 days, the median Sydney house price has risen by $20,300 to a new all-time record high of $1,213,700
Clearance rates up 20% yoy
Mortgage debt to the moon
We are off to the races….. again
I’d rather a Royal Commission into the debt peddlers on the coalface.
Global leadership denied again. We must try harder. Oi! Oi! Oi!
This will get even better as GDP slows and insatiable Aussie bubble buyers with debt continue do their thing. Back at number 1 soon, surely!
…… or just the interest lol.
this wouldn’t have happened if the rodent was still PM
Dr. Rodent to you.
If you really want moar debt – tell this guy, he’s already got highly effective campaigns going on crime, boats and drugs, and he fixed the internets so just think what he can do with debt!!!
http://steveirons.com.au/engage/surveys/say-community-survey/
The global debt bubble is performing nicely.
The moral of 2008 seems to be lost on you all: He who gorges on borrowing shall be rewarded hansomly and he who is stupid enough to save shall be made destitute. It doesnt matter if you’re in iceland: if yo uhad a mortgage, you got to keep your house and the debt was wiped clean or if you’re in EU, th emore you borrowed the less you gotto pay and higher your capital gain was on your assets…..debt loaders are winners and savers are schmucks!!!
+10,000 this
Touché.
The only thing I’d add is that it works until it doesn’t and we just don’t know when that moment will come.
Is anyone else getting to the point of surrender? I am questioning more and more how long I can support the ‘return to mean’ narrative in my mind. Capitulation sentiments are getting stronger…