Australia's housing debt reaches record high

Australian consumers are facing more housing debt than ever before, new research has revealed.

An analysis of Australian Prudential Regulatory Authority (APRA) data by comparison website finder.com.au has revealed that the proportion of owner-occupier housing debt per adult is currently at an all-time high of 89.3 per cent.

Bessie Hassan, consumer advocate at finder.com.au, said the figures show the amount of housing debt per adult has increased by 136 per cent in just over a decade.

“When looking at outstanding bank debt per Australian adult, the amount of owner-occupier housing debt has skyrocketed in the last 11 years of available data – from $20,802 in December 2004 to $49,165 in December 2015,” Ms Hassan said.

Ms Hassan said the record high result was primarily due to rapid house price rises during this period.

“These increasing prices have pushed up loan sizes, with the average national home loan size jumping from $189,000 in January 2004 to $372,400 this January – an increase of almost 100 per cent,” she said.

“This has grown much faster than inflation, which would have increased an asset by only about 34 per cent in the same period.

“In addition, Australians are becoming more comfortable with housing debt than previous generations, as a result of skyrocketing property costs.”

Ms Hassan added that the upwards trend of housing debt will continue as long as demand for Australia’s housing market continues to grow.

“If there were falls in the housing market like some experts are predicting, it could have profound implications for mortgagees’ capacity to service their debt,” she warned.

The analysis also found housing debt has significantly outpaced credit debt over the past 11 years.

“Credit card and personal loan debt – which includes revolving credit, credit card liabilities, leasing and other personal term loans – has remained relatively stable, rising 18 per cent from $4,999 in December 2004 to $5,885 at the end of 2015,” Ms Hassan said.

[Related: Big four home loan satisfaction slips]

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