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Household debt hits $620 billion

HOUSEHOLDS borrowed a total of $22.4 billion during the September quarter in the form of loans, including $14.6 billion in bank loans. This raised total household debt to $620 billion at the end of the quarter, according to the Australian Bureau of Statistics.

The ABS figures indicate the household debt to equity ratio rose 7 per cent during the quarter to 113.4 per cent, influenced significantly by the negative valuation effects of equities. During the quarter, $42.5 billion was wiped from the value of equities held by householders.

Households also voluntarily reduced their equity holding by a net $2.1 billion, with the major contributor being sales of $2.7 billion in bank shares and $1.3 billion in private non-financial corporations’ shares.

The listed share market decreased by $51.6 billion to $681.8 billion with net new issues of $5 billion and a valuation decrease of $56.6 billion.

The value of the unlisted share market decreased by almost $10 billion to $716 billion during the quarter while the value of derivative contracts on issue at September 30 decreased by $4.9 billion to $106 billion.

Australian corporations and government institutions issued a net $16.6 billion in bonds during the quarter, including $5.5 billion issued through the banking sector.

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