Australian homeowners reduce their spending when their mortgage debts are higher, according to the effect of mortgage debt on consumer spending.
A study published by the Reserve Bank of Australia (RBA) has highlighted an "over-indebtedness effect," as households cut back on their spending when they have more outstanding mortgage debt.
"Households reduce their spending when the gross value of both their debt and their assets increases," says the report.
According to the data, the ratio of household debt to disposable income in their country has reached a record level of 190%. The study also revealed that home loans had the biggest impact on spending, despite rising incomes and housing prices.
"We estimate that annual aggregate consumption growth would have been higher by about 0.2 to 0.4% if mortgage debt had been maintained at the 2006 level," the study said.
The study also revealed that the increase in homeowner debt had significant consequences for overall economy spending and partly explained the "break-up" head "of unusually low household spending since the 2008-2009 global financial crisis.
According to the Australian Bureau of Statistics (ABS), the value of new lending households fell 1.3% in May.
The ABS said that personal finances had also dropped 0.7% in May, following a 4.2% rise in April, and a 16.2% decline from a year earlier. on the other.
CommSec found other signs of economic hardship as the value of home renovation loans dropped 1.2% to a record $ 210 million in May. He also noted that the average loan for an established home had decreased, with homeowners choosing to reduce their debts rather than spend.
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