Debt

Debt in Australia among houseowners is the highest in the world when comparing size of houseowner debt to real income. The reason for this surge in debt by Austrialian homeowners is that Australia has grown fast in making credit easy to get. By giving credit to people who can’t pay their bills, credit authorizing agencies have contributed to their reckless spending. Australians are now buying things that they can’t afford and never knew that they wanted before credit was passed out to whomever could fill out an application form.
Australians are now into building huge family homes, buying land to build the home on and spending more on gas to get to places where they do their business like offices, shopping and, of course, schools. Fuel bills are not the only high cost debt maker for Australians. Heating bills have soared and homeowners are deciding whether to pay their mortgage or their heating bill.
Australia has 16 million credit card users which makes up about 72% of their population. 72% of Australians are borrowing money at astronomical limits. Currently, Australian’s have more than 22 billion in credit card debt. Figures from the Federal Reserve Bank of Australia estimates total debt by Australians including mortgage, credit card and personal loan to be, right now, at $1.2 trillion. This figure shows a 71% jump in five years.
In easier terms to understand, $56,000 is owed by every man, woman, and child in Australia. If you think that all Australians are wondering how they are going to pay their bills and worrying about it, you are mistaken. Australian spending is mirrowing spending practices in Greece before they had to file bankruptcy with the European Union.
Some who are profiting from all this abandoned spending like sellers are thrilled with the increased sense of fashion, home furniture, internet games and spending in non essential goods. The current amazing spike in debt might have had its impetus with the easy access for first time home buyers from the Australian government of $24,000. The rush of dreams of a bigger house drove many people to take the loan and empty out their piggybanks.
Now, comes the bad part, Australians are predicted to default on those loans in 2010. $24,000 loan for a one year lease is somewhat expensive. Imagine paying for that one year loan for the rest of your life if your personal income has ceased to be or has remained steady. The steady part is the Australian government that wants its money back, Now.