Household savings ratio at near 25-year high as wealth and mortgage growth decline: RBA charts

The growing savings culture of Australian households has been graphically revealed in the latest RBA Chart Pack, which shows the household savings ratio at a near 25-year high.

At the same time, net household wealth has declined to well below pre-GFC levels, matched by a steady fall in the value of residential property relative to household income and an increase in household debt from 50% to 150% of income.

A graph on credit growth by sector shows how mortgage lending growth has fallen since 2004, while personal lending continues to contract (as households deleverage). Business lending seems to be rising up from the doldrums.

The chart pack also shows the collapse in demand for new homes, with detached housing approvals falling steadily since about 2008. The chart also shows the long-running volatile nature of unit approvals.