How is debt distributed across Austria?

Source: HFCS Austria 2017, OeNB.

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The map shows the share of indebted households for Austria’s provinces. If you hover over the provinces, you will see the share of indebted households and the type of debt they have.

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Household indebtedness differs strongly, with less than 30% of households in Carinthia and Vienna, respectively, holding debt. The highest share can be found in Vorarlberg where more than 40% of households are indebted.

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Note that in Vienna, where the home ownership rate is low, the share of households that hold uncollateralized debt is a lot higher than the share of households with collateralized debt. In all other provinces, the share of households holding collateralized debt is over 15%.

How much debt do Austrian households hold?

Source: HFCS Austria 2017, OeNB.

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The chart indicates how much debt Austrian households hold.

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On average, Austrian households hold almost EUR 20,000 of debt. The conditional mean (red line), which is calculated on the basis of households with debt only, amounts to EUR 58,000.

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You can see that almost three-quarters of households do not hold any debt at all or less than EUR 5,000 of debt. At the right end of the distribution, i.e. for the remaining quarter of households, there is a sharp increase to over EUR 100,000.

What is the relationship between Austrian households’ debt and their gross wealth?

Source: HFCS Austria 2017, OeNB.

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The chart shows the percentages for households holding debt in general, holding collateralized debt and holding uncollateralized debt in relation to their position in the gross wealth distribution.

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Households below the median of gross wealth (0.5) almost exclusively hold uncollateralized debt, as indicated by the curve for households with debt crossing the curve for households with uncollateralized debt.

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Households above the median of gross wealth hold both types of debt, with collateralized debt accounting for the lion’s share.

What is the relationship between the amount of debt and homeownership?

Source: HFCS Austria 2017, OeNB.

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The chart presents the amount of total debt by tenure status of the household main residence (owned, free use or rented). You can see that households that own their main residence hold more debt in absolute terms. This is due to the fact that this group of households mostly holds collateralized debt. Renters, on the contrary, primarily hold uncollateralized debt.

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In Austria, the shares of indebted households by tenure status are as follows:

Tenure status	Share of indebted households in total households
Owner/free user	37.8%
Renter	27%

Which households hold debt?

Source: HFCS Austria 2017, OeNB.

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The chart shows which households hold which type of debt over the life cycle.

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Uncollateralized debt is mostly held by one-person and single-parent households. The former hold debt more or less regardless of their age.

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Collateralized debt, however, is primarily held by two-adult households that have two or more children. Moreover, this tends to be the case when the household head is between 40 and 45 years of age.

How do Austrian Household think about debt?

Source: HFCS Austria 2017, OeNB.

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The Household Finance and Consumption Survey (HFCS) for Austria asks respondents, amongst other things, the following question: “Do you think it is a good or bad idea to buy goods which are paid for with a loan?”

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The answers indicate that 17% of Austrian households think that it is a good idea to do so, whereas 29% think that it is a bad idea. The majority of households (54%) are ambivalent, stating that going into debt is sometimes a good idea, sometimes not.

Bonus material - 3D chart: Which households hold which type of debt with respect to the joint distribution of wealth and income in Austria?

Source: HFCS Austria 2017, OeNB.

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The chart shows the joint distribution of Austrian households’ gross wealth, their income and debt. The third dimension shows the (kernel) estimate for the probability of holding (un)collateralized debt for each combination of all 2D distributions (income and gross wealth).

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You can see that collateralized debt (blue-yellow surface) is primarily held by households with high income and high gross wealth. Uncollateralized debt (blue-red surface), on the contrary, tends to be held by households with lower gross wealth. However, within the group of low-wealth households, those with higher income are more likely to hold uncollateralized debt.

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In terms of financial stability, the results above are a good sign. They mean that the large amounts of collateralized debt are held by households that have relatively high levels of gross wealth and income. However, the socioeconomic implications that arise from going into debt for individual households depend on their position in the distributions of gross wealth and income. Especially in a time of crisis.