household debt

Westpac is on a real downer: predicting a serious downturn

Record high household debt levels are not sustainable, warns a leading bank economist.

At half a trillion dollars, housing and personal debt has hit 162 percent of the average household’s annual disposable income – higher than levels before the global financial crisis.

Westpac Chief Economist Dominick Stephens told Nine to Noon the decline in dairy prices was hurting the regions, but the downturn following the end of the Canterbury rebuild would be more severe than most people were prepared for.

The rebuild played a huge role in the “rock star economy” between 2012 and 2014, with the international reinsurance industry dropping $20 billion on New Zealand and the government pumping in another $10b.

As that money dried up, some business owners could find their businesses were not as robust as they thought, Mr Stephens said. Read more »

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