The Balance Sheet of Australian Households is Staggeringly Healthy

Why are we so worried about household debt?

 

Because it is an average. Like “weekly earnings”.

The person living in a huge Sydney harbourfront mansion is vastly different to a person living in a tiny run down unit out in a low socio-economic outer suburb.

 

I'm highly leveraged myself, but the obvious answer to why be worried about high debt is the asset value falling.

It does look good but remember, things looked mostly healthy moments before the GFC...

 

Would be interesting to see median and upper lower quartile, this range would give a much better analysis vs averages...

 

Australia is actually have better wealth distribution than most of the developed nations. We were the top median wealth major economy in the world in recent past

 

Probably obvious but the liability doesn't drop when house prices drop because people who are fully leveraged are tied into the agreement.
If there's a recession, it's the people who have recently bought and lose their job that have the problem.
I guess the question is how to keep the game going for another 20 years now that interest rates are this low.

 

The balance sheets may look "healthy" because those are mostly made of a lot of paper gains. However, many Australians have a Liquidity problem.

Most Australians couldn't cover $1,000 in an emergency | Savings.com.au

• Only 45% could cover an unexpected $1,000 emergency expense with their savings.
• More than half of respondents (56%) could only cover living expenses for up to 3 months.
• 19% of those respondents would only be able to cover living expenses for less than 2 weeks.
• Almost one in three Australians surveyed have struggled to pay for the essentials, being such as food, housing, utilities or health care in the last 12 months (30%).
• 48% of respondents who own credit cards do not pay off their closing balance every month.
• 43% of Australians surveyed would struggle financially if their pay was delayed by two days.

 

The actual name given by the OP actually cracks me up.
Take away or threaten to modify some tax laws regarding negative gearing and it all goes south pretty quick smart.
If for any reason immigration slows right down the market would take a hit as well.
Then you have billions of dollars in foregone revenue by the various state governments for stamp duty relief and FHOG.
What happens to the market if the state government suddenly finds themselves in massive debt and climbing.
Services have to be cut.
Perth is a great case study of a government left with billions of dollars in debt and no meaningful immigration for a long time , and lots of people never saw it coming.

 

Im sorry but a survey where the analysis is not reported, and on a click bait site, is of less than zero value.

IE, compare the same question phrased differently:

If you had an emergency repair to fix your car could you find $1,000?

Compared to:

If you find that your mother is dying, could you gather the money to fly interstate to her immediately and take a few days off work to be with her? (at a cost of say $1,000)

 

1000 is too small of a sample to be statistically relevant. Any indication on demographic, location and age group of the people the survey? The site has an agenda too

 

Or those on Interest-Only, hence why APRA is targeting these.