Deutsche Bank says despite high household debt, Australian households are more
resilient to Reserve Bank of Australia rate hikes than expected. Improving
Household balance sheets are helping borrowers absorb tighter policy. Macro
strategist Lachlan Dynan says household asset growth remains strong and
debt-to-income has stabilized; he estimates the household debt-to-asset ratio is
at its lowest since 1997. Dynan adds the cash-flow transmission of monetary
policy appears weaker than over the past decade, and broader household
balance-sheet strength — not just housing — may help offset wealth losses from
weak house prices.
