“About three out of ten over-indebted are’

The latest household expenditure Survey (HES) and survey of income and housing (SIH) from the Australian Bureau of Statistics, run every six years, paints a picture of rising costs and a slowdown in wage growth, but increasing household wealth boosted by the skyrocketing real estate prices.

In the four years between 2003-04 and 2007-08, the average household weekly disposable income grew from $274 to $982, but in the following eight years, 2015-16, it grew by only $27 to $1009.

“The real income in six years, an average of about 4 per cent-after adjusting for inflation and the size of the budget,” said ABS chief economist Bruce Hockman. “We know that the wages have been relatively flat over the last 12 months.”

Between the 2013-14 and 2015-16, the average assets of private households increased by 11 percent to $929,400, mainly because of the total value of the real estate assets owned by the typical household rises from 14 percent to $626,700.

The average household indebtedness, however, has almost doubled since 2003-04, from $94,000 $169,000 in 2015-16. More than a quarter of households have debt in the amount of three or more years, the value of their disposable income, with a further 2 percent of the holding company debt in the amount of three-quarters or more of the value of their household assets.

“On the basis of these comparisons, three in 10 households with debt in Australia as ‘over-indebted’,” Mr Hockman said.

Nearly 50 percent of households with a mortgage were over-indebted in 2015-16, the younger real estate owners, in particular, the acquisition of more debt. From the house, led by a 25 – to 34-year-olds, 62 per cent were in debt, compared with 51 percent of households that year under the leadership of a 35 – to 44 -.

“Almost half of our most wealthy households have a property, the debts are heavily in debt and holds an average property debt of $924,000,” said Mr. Hockman. “This makes them particularly vulnerable if the market conditions or household, the economic conditions change.”

The study also revealed that the Aussie house, the expenditure for a growing share of their income on “basics” such as housing, food, energy, health and transport are to be kept, in contrast to “discretionary” purchases.

The expenditure for foundations has increased from 56 per cent of the weekly expenditure of households in 1984 to 59 percent in 2015-16. “The largest increase in the last six years has actually been on training and household-related services, such as cleaning products, pest control,” said Mr Hockman.

“The thing that wouldn’t change so much, fuel and electricity. This is a reflection which makes the prices really increase, only began to [recently], so that it is not fed to this data.”

In 1984, the food lasted for up to 20 percent of household expenditure, followed by transportation at 16 percent and housing to 13 percent. In 2015-16, housing, the biggest expense is now up to 20 per cent, followed by food at 17 percent and 15 percent.

Since the last survey in the year 2009/10, the expenditure on education increased by 44 percent and spending on household services such as cleaning products and pest control, an increase of 30 percent. In the meantime, the energy costs are 26 per cent, the health sector with 26 percent and housing to 25 per cent.

“Higher costs for housing are certainly impact more on low-income households,” said Mr Hockman. “The influence shut out of the market, it is not always to the benefit of the people at the top end are the ever-rising prices of assets.

“You are now devote costs an increasing part of their expenditure for the living, so that below about 23 percent of income goes to housing, compared with around 18 per cent at the upper end.”