Michele Bullock, Reserve Bank of Australia’s (RBA) Assistant Governor for Financial System is out on the wires now, via Reuters, making her scheduled speech titled “The Evolution of Household Sector Risks” at an Australian Industry Group event, in Albury.
Key Headlines:
Widespread financial stress among households is not imminent.
Banks’ mortgage risks appear to be currently low.
Arrears rates on housing loans remain very low.
No doubt some households feeling the pressure of high debt levels.
Number of reasons why debt situation is not as severe as numbers suggest.
Only relatively small share of borrowers finding it hard to service a principal-and-interest loan.
A large proportion of debt is held by households with the ability to service it
“Household debt in Australia has risen substantially relative to income over the past few decades and is now at a high level relative to international peers.
This raises potential vulnerabilities in both bank and household balance sheets.
While the risks are high, there are a number of factors that suggest widespread financial stress among households is not imminent.
It is nevertheless an area that we continue to monitor closely.”
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