Australians are becoming more comfortable carrying higher levels of debt, even as they continue to save at near-record levels.
Genworth's Streets Ahead survey of homebuyer confidence has found that Australian consumers are becoming more comfortable with the idea of higher LVRs and higher levels of debt. RFi research director Alan Shields, who prepared the index, said average LVRs could begin to creep up as homebuyers feel more amenable toward taking on more debt.
"What we're finding is that there is almost no correlation between indebtedness and stress. Australians appear slightly more indebted than they had been, yet stress is not going up. And if they're comfortable with their debt and they're not stressed, the likelihood is they're going to borrow more," Shields said.
The Genworth survey found 32% of respondents were comfortable borrowing at LVRs above 80%. The result was up from 29% in September last year. In spite of the higher LVRs, Shields said Australian homeowners seem to be having an easier time meeting their repayments.
"The proportion of people comfortable buying at higher LVRs is up, but the proportion of people both anticipating and experiencing mortgage stress has improved," Shields said.
Yet a recent Dun & Bradstreet survey suggested that more Australians are being forced to rely on credit due to low cash flow. The survey found that 41% of households with children would have to turn to credit cards to meet living costs.
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