One important point to remember with debt. As long as the debt taken on is to purchase an asset which is appreciating at a faster rate, and serviceability is not a concern, then the situation is sustainable. Understandably higher debts run higher risks if asset prices start falling and/or interest rates rise markedly. The chart shows household assets and debt to income on the same chart for proper comparison.
Comments
Sathyan Nair
I view debt as a progressive attribute, whether in finance or relationships, provided the reason for indebtedness builds association and collaboration of labour and cognition.
Henry Kaye
This chart is a crime against finance. That ratio to assets would look even 'better' if disposable income halved! How relevant is the value of Grandma's house in Mossman to the kids with an $800,000 mortgage in Blacktown? Google "negative equity"