Invest
Investors smarter than owner-occupiers over debt
The latest analysis by CoreLogic of ABS data shows how investors are taking on debt better than owner-occupiers, as well as how the former is overtaking the latter even though both asset wealth and household debt are at record highs overall.

Investors smarter than owner-occupiers over debt
The latest analysis by CoreLogic of ABS data shows how investors are taking on debt better than owner-occupiers, as well as how the former is overtaking the latter even though both asset wealth and household debt are at record highs overall.

New RBA figures place the ratio of household debt to disposable income at 193.7 per cent at the end of June 2017, increasing by 2 per cent over the quarter and 3.9 per cent over the year to a new record high.
CoreLogic research analyst Cameron Kusher said the majority of this debt is related to housing, with the ratio of housing debt to disposable income being at 136.4 per cent, rising 1.4 per cent over the quarter and 3.9 per cent over the year.
“Clearly, household and housing debt has increased over time relative to disposable incomes. Of note is that since the financial crisis, the rate of escalation has slowed,” Mr Kusher said.
Out of that 136.4 per cent, only 33.2 per cent is held by investors, indicating investors are playing their cards right when it comes to dealing with debt, while the other 103.2 per cent is held by owner-occupiers.
Meanwhile, the ratio of household assets to disposable income at the end of June 2017 was at 935.6 per cent, up 6.6 per cent over the last year, and housing assets to disposable income was at 516.5 per cent, up 7.8 per cent over the last year; both were record highs.
Mr Kusher said by comparing the asset and debt ratios, despite the high levels of debt, assets are pulling their weight and are in fact supporting debt.
Further, recent years have shown the ratios of household and housing debt to assets have been declining. As of June 2017, the ratio of household debt to assets was at 20.7 per cent, and housing debt to assets was at 26.4 per cent.
One of the reasons behind the declining ratio of debt to assets, according to Mr Kusher, is the fall of interest rates. As of the end of June 2017, the ratio of household interest repayments to disposable income was 8.7 per cent and to housing was 7.1 per cent.
Low rates translate for debtors with debts can maintain previous repayments, which allows for additional debt to be repaid when interest rates fall.
“The latest household finance data from the RBA highlights that Australian households are heavily indebted, largely due to housing. While debt levels are high, the value of household and housing assets are, at this stage, considerably greater than the level of debt,” Mr Kusher said.
“Of course, if household and housing asset values begin to fall in the future, the accompanying debt may not fall at the same rate and that remains the main concern with the ongoing increase in household and housing debt.
“Although Australia survived the financial crisis with much less damage than many other countries, of note was the fairly sharp rise in the ratio of household and housing debts to assets over that period. A more sustained downturn could potentially see a much greater increase in these ratios as asset values fall but the debt against these assets remain.”

Property
Australia is in the midst of ‘the biggest rental crisis in history’, expert says
Australia’s property market has never been more paradoxical, with intense rental pressure recorded in a majority of towns and cities, but COVID may not be the culprit. ...Read more

Property
Apartment rents tumble off the cliff in Sydney and Melbourne
Apartment rents have fallen off a cliff in Sydney and Melbourne on the back of collapsing demand among internationals students and migrants, and changes to personal finances. ...Read more

Property
RBA’s 30% property growth forecast to materialise in 75% of regions
Experts believe that RBA’s forecasted 30 per cent growth in property prices over the next three years will materialise in 75 per cent of Aussie regions. ...Read more

Property
HomeBuilder applications soar as first-timers enter the market in record numbers
Record numbers of first home buyers are coming into the market assisted by the government’s HomeBuilder stimulus, which is expected to help spur $50 billion in economic activity. ...Read more

Property
Dual Occupancy Homes – Why They Are A Smart Investment In The Current Market
Promoted by Metricon ...Read more

Property
4 factors affecting property market trends in 2021
Following a tough 2020, property investment activity is expected to rebound strong, expanding by 50 per cent in the second half of 2021. ...Read more

Property
House prices tipped to surge 30% on the back of cheap money
According to new documents released from the Reserve Bank of Australia, persistently low interest rates could push up property prices by as much as 30 per cent. ...Read more

Property
Double-digit price growth to stick around as ‘property boom’ arrives
According to leading indicators, Australia’s property boom officially began in November, following several slow months on the back of the COVID crisis, with double-digit price growth already logged ...Read more

Property
Australia is in the midst of ‘the biggest rental crisis in history’, expert says
Australia’s property market has never been more paradoxical, with intense rental pressure recorded in a majority of towns and cities, but COVID may not be the culprit. ...Read more

Property
Apartment rents tumble off the cliff in Sydney and Melbourne
Apartment rents have fallen off a cliff in Sydney and Melbourne on the back of collapsing demand among internationals students and migrants, and changes to personal finances. ...Read more

Property
RBA’s 30% property growth forecast to materialise in 75% of regions
Experts believe that RBA’s forecasted 30 per cent growth in property prices over the next three years will materialise in 75 per cent of Aussie regions. ...Read more

Property
HomeBuilder applications soar as first-timers enter the market in record numbers
Record numbers of first home buyers are coming into the market assisted by the government’s HomeBuilder stimulus, which is expected to help spur $50 billion in economic activity. ...Read more

Property
Dual Occupancy Homes – Why They Are A Smart Investment In The Current Market
Promoted by Metricon ...Read more

Property
4 factors affecting property market trends in 2021
Following a tough 2020, property investment activity is expected to rebound strong, expanding by 50 per cent in the second half of 2021. ...Read more

Property
House prices tipped to surge 30% on the back of cheap money
According to new documents released from the Reserve Bank of Australia, persistently low interest rates could push up property prices by as much as 30 per cent. ...Read more

Property
Double-digit price growth to stick around as ‘property boom’ arrives
According to leading indicators, Australia’s property boom officially began in November, following several slow months on the back of the COVID crisis, with double-digit price growth already logged ...Read more