Average household net worth up $60,000

Spicers' Household Savings Indicators quarterly survey said households collectively had assets of $478 billion at the end of last year, against debts of $120 billion.

But households are piling on new debt faster than asset values are rising. In the last three months of 2004, the value of the housing stock rose 2.9 per cent and all household assets rose 2.7 per cent, but debt rose 3.7 per cent.

Over the whole of 2004, households' assets rose 12 per cent or $51 billion, with $44 billion of that a rise in the housing stock.

Financial assets such as superannuation and bank deposits rose just 6.1 per cent or $7.1 billion.

But household debt rose 14.9 per cent or $15.5 billion last year. As a result, interest bills are rising - in dollar terms and as a share of household incomes.

Debt servicing costs take a bigger bite out of incomes than at any time in the past 15 years and are higher than in Australia or Britain.

Spicers economist Rozanna Wozniak said interest rates might rise further, which would increase debt-servicing costs.

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