Despite higher interest rates and evidence of more subdued retail spending, Australian households are borrowing substantially more than they did 12 months ago, according to new analysis released by financial comparison website, RateCity.
The analysis has claimed that Australian households are carrying $86.3 billion more in debt than they were 12 months ago, and cites data from the Australian Prudential Regulation Authority showing Australians have borrowed 12.6 per cent more in June ($771.3 billion) than in the previous year ($685 billion).
It noted that household deposits had seen a slower incline of 8 per cent in June compared to the same month last year with households holding $34.5 billion more in the bank.
Commenting on the analysis, RateCity chief executive Damian Smith said households needed to be cautious about their debt levels.
“Clearly Australian households are more comfortable with borrowing money now than they were last year, but there are risks of over-borrowing and paying more interest than needed,” he said.
