The Reserve Bank of Australia (RBA) has released its debt ratios for the March quarter, which revealed that Australian households’ debt loads have hit another all-time high.
The ratio of household debt to disposable income hit a record high 189.7% in March, with mortgage debt to income a record high 140.1%:
However, mortgage debt retraced slightly to 95.9% of GDP in the March quarter:
The reason for the difference is because most of the gains from Australia’s GDP growth has gone to businesses rather than households:
The only saving grace is that the recent cratering of mortgage rates means that the ratio of debt repayments to income is below the 2008 peak; albeit still way above the other Anglosphere nations:
The primary reason why mortgage repayments remain so high, despite cratering mortgage rates, is because Australian dwelling values as a percentage of annual household disposable incomes are almost double early-1990s levels:
That said, the house price bust has reduced housing values from a peak of 530% of disposable income in December 2017 to 484% of disposable income as at March 2019.