http://seekingalpha.com/article/180032-australias-little-debt-obsession
Australian families now owe more than their counterparts in the recession-stricken US previously regarded as the credit capital of the world. American household debt stands at $US44,000 per person, or just under $50,000.
BORROWERS have set a new record: for the first time we owe more in household debt than the entire Australian economy earns in a year.
Reserve Bank figures show mortgage, credit card and personal loan debts now stand at $1.2 trillion, up 71 per cent from just five years ago and equating to $56,000 for every man, woman and child in the country.
Our spending binge, fuelled most recently by the Governments First Home Owner Grant, means personal debt now totals 100.4 per cent of Australias annual GDP one of the highest ratios in the developed world.
Its the first time household debt has cracked 100 per cent of annual GDP and its a terrible, terrible sign, said University of NSW economics professor Steve Keen.
It shows we are living beyond our means and many highly geared borrowers are now extremely vulnerable to further rate rises they are already saturated with debt and will not be able to tolerate much of an increase to their repayments.
Mortgages account for almost 90 per cent of annual GDP, up from 17 per cent in 1990 and by five per cent in the last year alone as first-home buyers have flooded the market.
The remaining 11 per cent of GDP is taken up with $45 billion on credit cards and over $90 billion on personal loans, car finance and other personal debts.
http://seekingalpha.com/article/180032-australias-little-debt-obsession
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