Australia has the highest household debt to disposable income ratio in the world, even higher than the USA.
In the 1980s the average Australian household had debts totalling about 40% of their disposable income. In 2006 this ratio had increased to 158% with the costs of housing being the major factor. Over the past decade income growth has failed to keep up with property prices, with many of the increases in prices driven by government incentives for first home buyers.
Whilst the GFC saw households attempt to reduce their debt levels, rising property prices mean that home buyers are taking on bigger loans than ever before, with mortgage payments thereby taking a larger percentage of disposable income. According to the Reserve Bank of Australia total mortgage debt in 2010 was 38.2% larger than national household income, with the figure up from 33% in 2009.
Additionally, a recent report from the Melbourne Institute indicated that in the 2010 June quarter, 36.6% of Australians had credit card debt, overhauling the figure of 33.9% for mortgage debt as the most common debt for Australian households..
With this level of debt and a low level of savings, Australian's historical dream of a debt-free home and retirement savings is becoming less of a reality.
To ensure you have a strong savings plan, are debt-free to achieve your dreams of a comfortable life in retirement talk to Andrew Frith, Leenane Templeton's award winning investment advisor. He is here to assist you in making your dreams reality. Andrew is also an Australian expert in Self Managed Super Funds.
DISCLAIMER: The information contained in this document is based on information believed to be accurate and reliable at the time of publication. Any illustrations of past performance do not imply similar performance in the future. To the extent permissible by law, neither we nor any of our related entities, employees, or directors gives any representation or warranty as to the reliability, accuracy or completeness of the information, or accepts any responsibility for any person acting, or refraining from acting, on the basis of information contained in this communication. This information is of a general nature only. It is not intended as personal advice or as investment recommendation, and does not take into account the particular investment objectives, financial situation and needs of a particular investor. Before making an investment decision you should read the product disclosure statement of any financial product referred to in this newsletter and speak with your financial planner to assess whether the advice is appropriate to your particular investment objectives. financial situation and needs.
In the 1980s the average Australian household had debts totalling about 40% of their disposable income. In 2006 this ratio had increased to 158% with the costs of housing being the major factor. Over the past decade income growth has failed to keep up with property prices, with many of the increases in prices driven by government incentives for first home buyers.
Whilst the GFC saw households attempt to reduce their debt levels, rising property prices mean that home buyers are taking on bigger loans than ever before, with mortgage payments thereby taking a larger percentage of disposable income. According to the Reserve Bank of Australia total mortgage debt in 2010 was 38.2% larger than national household income, with the figure up from 33% in 2009.
Additionally, a recent report from the Melbourne Institute indicated that in the 2010 June quarter, 36.6% of Australians had credit card debt, overhauling the figure of 33.9% for mortgage debt as the most common debt for Australian households..
With this level of debt and a low level of savings, Australian's historical dream of a debt-free home and retirement savings is becoming less of a reality.
To ensure you have a strong savings plan, are debt-free to achieve your dreams of a comfortable life in retirement talk to Andrew Frith, Leenane Templeton's award winning investment advisor. He is here to assist you in making your dreams reality. Andrew is also an Australian expert in Self Managed Super Funds.
DISCLAIMER: The information contained in this document is based on information believed to be accurate and reliable at the time of publication. Any illustrations of past performance do not imply similar performance in the future. To the extent permissible by law, neither we nor any of our related entities, employees, or directors gives any representation or warranty as to the reliability, accuracy or completeness of the information, or accepts any responsibility for any person acting, or refraining from acting, on the basis of information contained in this communication. This information is of a general nature only. It is not intended as personal advice or as investment recommendation, and does not take into account the particular investment objectives, financial situation and needs of a particular investor. Before making an investment decision you should read the product disclosure statement of any financial product referred to in this newsletter and speak with your financial planner to assess whether the advice is appropriate to your particular investment objectives. financial situation and needs.
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