Our Debt Deal

By The Muirfield Team | January 1, 2011

Australia has the highest household debt to disposable income ratio in the world, even higher than the United States¹. Over the past decade income growth has failed to keep up with property prices, with rapid growth over the past few years driven particularly by government incentives to first-home buyers.

And while the GFC saw households attempt to rein in their debt, rising property prices are pushing home buyers to take on bigger loans than ever before.

Reserve Bank calculations show total mortgage debt was 38.2% larger than national household income in February this year, up from 33% at the same time in 2009.

Rising interest costs are also starting to impact household finances, taking a larger percentage of disposable income.

In addition to this, a recent report by the Melbourne Institute showed that in the June quarter for this year, 36.6% of Australian households had credit card debt, overtaking mortgage debt (33.9%) as the most common form of debt in Australian households².

Would you like to talk with a financial adviser about strategies to help manage or reduce your debt?