How Risky Is Australian Household Debt?

Abstract

The Discussion Paper series is intended to make the results of the current economic research within the Reserve Bank of Australia (RBA) available to other economists. Its aim is to present preliminary results of research so as to encourage discussion and comment. Views expressed in this paper are those of the authors and not necessarily those of the RBA. However, the RBA owns the copyright in this paper.

Stamping out stamp duty: Housing mismatch and welfare

“…Our assumption that housing investment is determined by the household and not the business sector is consistent with the fact that households rather than institutional investors dominate the supply of rental properties in the Australian housing market. Kearns, Major, and Norman (2021) report that households and the nonprofit sector own 95% of dwellings in Australia, with only 5% owned by institutional investors. One reason for this feature, as 35 Explicitly, Kaas et al (2020) impose the following relationship between house and rental prices for realestate firms: (r + δ)p = p r − c m where c m is the cost of managing rental homes.…”

Making time to care differently for food: The case for the Armidale Food School

“…In the rush to secure necessary housing and, increasingly financial, futures and in the face of rising house prices, Australians are going into ever greater levels of debt. Australians are among the most indebted people on the planet with the average household debt to income ratio increasing at a faster rate and to a higher level than among households in most other countries (Kearns, et al, 2020). Among advanced economies, Australians have gone from having one of the lowest household debt-to-income ratios to one of the highest.…”