more broadly. however, there are a number of factors that suggest considerable resilience in the household sector to rising interest rates. first, aggregate household balance sheets are in very good shape. while households have high levels of debt, this is accompanied by sizeable holdings of assets ( graph 2 ). strong growth in housing prices over 2021 and early 2022 has boosted asset values for many homeowners, with housing assets now comprising around half of household assets. the small decline in housing prices in recent months has only marginally eroded some of the large increases seen over past years. graph 2 household balance sheet share of disposable income % assets % liabilities 1, 000 1, 000 housing 2022 1992 superannuation deposits other * * other assets include financial assets held outside of superannuation or deposits, consumer durables and all other non - housing non - financial assets ; other liabilities includes personal credit, student loans and all other non - housing liabilities. sources : abs ; apra ; rba furthermore, households have saved a large amount of money since the onset of the pandemic – around $ 260 billion. these savings have been put into redraw facilities as well as offset and deposit accounts. this reflects a couple of factors. considerable government support was provided to households and their employers during the pandemic. this meant that incomes held up very well. the banking system also helped households and businesses to weather the crisis by providing payment holidays and working with their customers to recommence repayments as their situation permitted. both of these factors were good for household cash flows. at the same time, consumption opportunities were curtailed, particularly for discretionary services. even though expenditure on goods increased, households were still spending less than they were prior to the pandemic. as a result, the household saving rate rose sharply ( graph 3 ) and many households therefore built up large liquidity buffers, including those households with mortgages. very low interest rates also helped many households add to their savings through reduced interest payments. since the start of the pandemic, payments into offset and redraw accounts have been substantial, totalling around 3½ per cent of disposable income ( graph 4 ). the accumulated stock of these savings could help to ease the transition to higher mortgage payments for many borrowers, allowing them to sustain higher levels of consumption than otherwise. graph 3 household saving ratio share of household disposable income % % scheduled mortgage

- evaluate. that has happened countless times before and will again, no doubt. it means that attention needs to be given to the things that help our economy work to deliver what we need even with a lower terms of trade. these were the sorts of things that made a bis central bankers ’ speeches difference before the mining boom. they are not my field of expertise. i can simply observe that things such as : • open, competitive markets ; • education and skill building ; • flexibility and adaptability ; • quality public infrastructure ; • strong public institutions, and pragmatic, balanced regulatory arrangements ; and • rewards for entrepreneurial risk - taking are likely to give us the best chance for the kind of prosperity we seek. public policy will have its own contribution in fostering such an environment, but it is businesses ( large and small ) and individuals making their own choices that will ultimately deliver whatever success we are capable of. bis central bankers ’ speeches