Australia’s 30-year mortgage tail wind runs out of puff

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The Reserve Bank of Australia (RBA) yesterday released its household debt data for the March quarter, which revealed that the ratio of household debt-t0-disposable income rose to 186.9%, whereas mortgage-debt-to-disposable income retraced slightly to 142.0%:

As you can see, both are a fraction below record highs.

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However, due to the cratering of mortgage rates to record lows (see above chart), the ratio of household and mortgage interest payments to income have fallen sharply, now tracking around early-2000s levels:

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.