There has been this misconception that as our population gets older, most will own their house outright and hence more will be immune from the credit crunch gripping the world.
In today’s AFR they published this interesting graph :
It would seem while more and more of Australia’s population, aka the baby boomer population is exceeding 60 years, the number of households that own their home outright is dropping at a significant pace. In fact, in 2004 the portion of households with a mortgage exceeded that of the number of households that owned their house outright. There are now more households with loans than those without.
One has to ask, why is this? Is this the baby boomers making the most of spiraling property prices and taking out home equity loans to finance the bathroom or kitchen renovation, the boat, the 4WD or maybe an investment property? One thing this graph does prove is Australia’s love affair with debt.