Business
Debt not a threat to Aussie households – but could slow the economy – Sydney Morning Herald
Special research for the Reserve Bank finds high level of household debt is manageable, but it could come at a cost to the broader economy.
But the RBA, which has taken official interest rates to a record low of 0.25 per cent to deal with the coronavirus pandemic, is more sanguine about household debt.
The research paper found almost all of the more than doubling in debt carried by Australian households since 1988 was due to low rates and inflation, the deregulation of the mortgage sector and relatively strong growth in real wages.
People used this combination to funnel money into the property market with the RBA finding much was …
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