The rise in real estate prices led to mortgage customers by taking on bigger loans, which, combined with an increased appetite for credit cards, is blamed for the growth to cash-strapped Aussie households.
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The Australian Bureau of Statistics Household Income, Wealth and Expenditure Survey found the average amount of debt has nearly doubled over the past 12 years â€” from $94,100 in 2003-04 to $168,600 in 2015-16. Most of this is represented by the ownership of the debt.
The research has been developed after 18 000 Australians were asked about their household income and the indebtedness of the financial year 2015/16.
The report revealed that 29%, or the equivalent of 2.9 million households, were classified as â€œfinancially distressedâ€ in terms of their debt-to-income ratio or the debt-to-asset ratio. It was 21% in 2003-04.
ABS figures showed household debt has almost doubled since 2003.
While three-quarters of Australian households have debt, the most common form of debt, credit, plastic cards of debt was held by 55% of the population.
It was followed by housing loans (34%) and student loans (17%).
And the most likely to be indebted are those paying off a home loan (47%) and households with people aged 25 to 34 years (33%, or 35 to 44 (34 percent).
Households with a person aged 65 years or older, or those who owned their home or rented, as well as the Aussies relying on a pension from the government, were the least likely to be over-indebted.
The cities where the number of households that have a debt too high included Darwin (32% of the population), followed by Perth (27%).
However, Sydney and Melbourne, had more quantities of most indebted people (407,000 and 419,600 respectively) to a combined 43% of the households.
Younger households (age 25 to 34) also had a higher rate of over-indebtedness â€” 62% were over-indebted and owed about $440,000 in property debt.
During this time Australians aged 35 to 44 years were 51 per cent over-indebted, and due to a huge $546,800 in real estate loans.
A large part of the debt has been put down to the price of real estate.
But the ABS chief economist Bruce Hockman told the richest Australians have also been put under financial pressure.
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â€œNearly half of our most wealthy households (47%) that have a property of debt are over-indebted, the holding of an average housing debt of $ 924,000,â€™ he said in a statement.
â€œThis makes them particularly vulnerable if market conditions or household economic circumstances change.â€
Originally published as Families crippled that debt levels double