"Prudent" households have reduced their debt appetite: RBA

The RBA has highlighted the more "prudent" approach Australian households are taking to managing their finances since the GFC in its latest Financial Stability Review.

This, it says, can be seen in "households' reduced appetite for taking on additional debt since the financial crisis".

"Household credit growth has been slower in the past five years – at an average annual rate of around 5.5% – than in the 20 years prior, when it averaged around 13.5%," says the RBA.

"Within household credit, personal credit has declined over the past five years, with a large fall in margin loans partially offset by modest growth in credit card debt.

"Growth in housing credit has also slowed over this period, to a current annual rate of around 4.5% despite a moderate pick-up in the value of housing loan approvals in the past few years," says the RBA.

The propensity among Australian households to reduce their debt burden was revealed in the RBA chart pack released in March.

Debt levels peaked at around 150% of household disposal income in the years preceding the GFC, having risen rapidly in the 1990s and early 2000s.