Record high debt is being offset by rising wealth according to CoreLogic

first_imgLow interest rates have helped make Aussies wealthier despite rising household debt said a leading property analystRISING household debt is being offset by increasing household wealth according to the latest research by CoreLogic.CoreLogic cited data from the Reserve Bank of Australia (RBA) which showed the ratio of household debt to disposable income was at a record high of 193.7 per cent at the end of June 2017.CoreLogic research analyst, Cameron Kusher, said most of this debt is housing related.“Clearly, household and housing debt has increased over time relative to disposable incomes. Of note is that since the financial crisis, the rate of escalation has slowed,” Mr Kusher said.More from newsMould, age, not enough to stop 17 bidders fighting for this homeless than 1 hour agoBuyers ‘crazy’ not to take govt freebies, says 28-yr-old investorless than 1 hour agoThe analysis revealed, however, housing assets and household assets have increased by 6.6 per cent and 7.8 per cent respectively — which is well in excess of the increase in household and housing debt, according to Mr Kusher.“The data reiterates that although debt levels are high, at this stage debt is well supported by assets which are valued substantially higher,” he said.Mr Kusher said a big contributor to the declining ratio of debt to assets has been the fall in interest rates.“The latest household finance data from the RBA highlights that Australian households are heavily indebted, largely due to housing,” Mr Kusher said.“While debt levels are high, the value of household and housing assets are, at this stage, considerably greater than the level of debt,” he said.Follow Kieran Clair on Twitter at @kieranclairlast_img read more