This means if the average person earns ,000 net, they are spending 9,600 per year.
While many other developed countries have seen a decline or “levelling out” of personal debt since the 2008 global financial crisis, Australia’s debt levels have continued to increase.
However, the high debt to income ratio means that an increase in interest rates or changes to housing prices could have serious consequences.
With income growth predicted to remain low and ongoing speculation about supply-and-demand issues in the housing market, Australia’s personal debt is often viewed as a major risk for both individuals and the country’s economy.
The bottom line is that if you have debts, it’s important to find a way to manage them.
So here are three strategies to keep in mind: Australia’s personal debt may be among the highest in the world when compared to GDP, but the majority of it is from home loans and investments.
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There is also the other 8.2% of household debt to consider.
If each Australian household owes an average of 0,000, then ,500 of it is “bad debt”.
This debt can be broken down into the following categories.