Million dollar mortgages leave wealthiest households vulnerable, ABS says

"The mean household debt has increased by 83 per cent in real terms since 2003-04. By comparison, the mean asset value increased by 49 per cent and gross income by 38 per cent."

Dr Hockman said younger borrowers were particularly prone to being over-indebted, as well as higher income families, who continue to hold most of the nation's debt.

"Nearly half of our most wealthy households (47 per cent) who have a property debt are over-indebted, holding an average property debt of $924,000.

"This makes them particularly susceptible if market conditions or household economic circumstances change," said Mr Hockman.

While the overall proportion of households with loans has been remarkably stable over the past 12 years at around 74 per cent, the size of their debt has almost doubled, adjusted for inflation.

Most of it is property debt, which has grown from $78,400 in 2003-04 to $149,000 in 2015-16.

Somewhat paradoxically given the surge in debt, separate data released by the bureau showed a significant increase in Australian families that say they are free of financial stress, even as they spent more of their weekly budgets on housing.

It said the proportion of households who report themselves as free of indicators of financial stress – such as an inability to raise $2000 in an emergency – rose to 59 per cent from 54 per cent six years earlier.

The improved financial resilience was recorded across all incomes groups, with the proportion of those in the bottom 20 per cent reporting no markers of stress rising from 36 per cent in 2009-10 to almost 40 per cent.

Among the top 20 per cent of households by income, 86 per cent said they were stress free compared with 80 per cent in 2009-10.

Some 1.3 million Australians – accounting for 15 per cent of the total – reported signs of financial stress, which is little changed from 2009-10, the data showed.

Part of the reason for the resilience may be because household wealth has also surged over the past six years to $929,400. Superannuation assets have lifted to an average $188,400 from $108,500.

Even though households appear to be coping, the figures showed housing is taking up a rising share of their weekly spending.

More than half – or $846 – of the average $1425 spent per week was on essentials, which is equivalent to 59 per cent of the total budget and up from 56 per cent in 1984.

Housing was the biggest drain, accounting for 20 per cent of the weekly budget, up from 13 per cent three decades ago.

By contrast, food has declined to 17 per cent of the weekly budget from 20 per cent, while transport is down to 15 per cent from 16 per cent.

According to the ABS, around 27 per cent of households in 2015-16 had liabilities equal to three or more years of income, which the Organisation for Economic Cooperation and Development defines as "over-indebted," according to the ABS.

When measured by assets, it found only 4 per cent of households fit the OECD's second definition of over-indebtedness, which is those who hold debt equal to 75 per cent or more of the value of their asset. Only half of those households fitted the definition of over-indebted across both measures.