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Australians well able to service mortgage debt overall: RBA
[MELBOURNE] The bulk of mortgage debt in Australia is held by higher-income households best able to service it, a top central banker said on Thursday, though there were pockets of stress where those on lower incomes had to take on a lot of debt to buy a home.
Reserve Bank of Australia (RBA) Assistant Governor Luci Ellis noted that higher-income households were not only likely to own their own home but also to have other properties as investments.
"This is why we say that most of the mortgage debt in Australia has been borrowed by those most able to service it," Ms Ellis told a housing conference in Melbourne. "That said, the lower-income households that do have debt, tend to have quite a lot of debt relative to their incomes," she added. "Overall it does speak to the need to be aware of pockets of potential stress within a more benign overall picture."
Australian households hold a relatively large amount of debt compared to other developed nations, which has been considered a threat to financial stability by some.