The net worth of the average Australian family has risen by an average of 10.6 per cent every year for the last decade to reach $600,000 per household in June last year. Economists warn that there is a catch to this apparent wealth however as much of the growth has been funded by debt. Associate professor Steven Keen from the University of Western Sydney says that at the bottom of the recession in the 1990's the nation's debt was around 78 per cent of GDP, but this has more than doubled over the last 15 years to 165 per cent. Dr Shane Oliver, chief economist at AMP Capital Investors, said that household debt was only around 40 per cent of disposable income, but this was now up to 160 per cent. "That means a 1 per cent rise in the mortgage rate back then is roughly equivalent to a 0.25 per cent rise today," he said.
