Household wealth hits a new record high

author-avatar By on September 26,2019
Household wealth hits a new record high

Photo by mahdis mousavi on Unsplash

Australia’s household wealth has hit a new record high, smashing the previous highest ever recorded figure of $10,422 billion in September last year.

Household wealth surged 1.6% in the June quarter to a new record high of $10,455.3 billion, following a 0.2% rise in the previous quarter, according to figures released by the Australian Bureau of Statistics (ABS) today.

The highest ever figure for household wealth was recorded in September 2018 ($10,422.3 billion).

The increase was driven by gains on financial assets in the share market, mainly in superannuation assets. However, this was partly offset by losses on residential real estate.

Chief Economist for the ABS, Bruce Hockman said the resurgence of the share market continues to lift wealth.

“The share market continued to build on gains seen earlier in the year, boosting the value of household shares held directly and through their superannuation funds,” Mr Hockman said.

“Residential real estate has had six consecutive quarters of real holding losses but the losses this quarter were smaller than previous quarters.”

Household wealth per person increased to $411,492 over the June quarter – an increase of $6,926 from the last quarter.

More Australians investing in property

Despite the $26.5 billion in losses on residential real estate, the data shows an increase in households investing in property.

Households invested $38.8 billion, an increase of $2.2 billion from the previous quarter. This is normal for the June quarter, but the rise was smaller than usual which reflects the softness in the property market.

While residential real estate losses held back some growth in household wealth, the rate of decrease in the value of residential land and property slowed somewhat.

Household’s demand for credit was the weakest in six years and continues to be impacted by the slowing growth in loans for residential property, refecting the tight lending environment and the weak housing market.

Even though the data reflects a lift in residential property investment, the data also shows low growth in investor loans.

The majority of the increase in household loans from banks were for owner-occupiers.

The data shows mortgage debt is growing at a faster rate than the value of residential land and property. The mortgage debt to residential land and dwellings ratio increased from 28.7 to 29.0.

Job vacancies fall for first time in five years

The number of job vacancies has fallen over the year for the first time since February 2014, according to ABS data.

The number of job vacancies dropped by 1.9% (in seasonally adjusted terms) over the year.

Mr Hockman said that “following a period of sustained growth’ the trend level of vacancies has been declining for the last three quarters.

This points to further increases in the unemployment rate, which currently stands at a 12-month high of 5.3%.

SEEK managing director Kendra Banks said the number of job ads on the website has been declining 8.6% year on year.

“Low consumer spending is having a direct impact on business spending with many companies tightening their budgets, which can include a restriction or hiring freeze,” she said.

The new data further strengthens the case for the Reserve Bank to cut the official cash rate when board members meet next week.

The official cash rate is at a historic low of 1.00%, with all the signs pointing towards another rate cut in October.


Latest Articles

author-avatar
Emma joined Savings.com.au as a Finance Journalist in 2019. She is a journalist with more than five years experience across print, broadcast and digital media, with previous stints at Style Magazines, 4ZZZ radio, and as editor of The Real Estate Conversation. She's most passionate about improving the financial literacy of young women and millennials by writing about complex financial topics in a way that's easy for the average Joe (or Jill) to understand. When she's not writing about finance she's watching Greys Anatomy (again).

Collections:

Need help finding a home loan?

Compare now

Get free insights & tips monthly

By subscribing you agree to the Savings Privacy Policy

Loading data please wait...

{{returnData.productName}}

Overview

Current Rate

{{returnData.currentRate | percentage:2}}

Comparison Rate*

{{returnData.comparisonRate | percentage:2}}

Rate Type

{{returnData.rateType}}

Advertised Rate

{{returnData.advertisedInterestRate}}

Comparison Rate*

{{returnData.comparisonRate}}

Monthly Repayment

{{returnData.monthlyRepayment}}

Interest Type

{{returnData.interestType}}

Total Interest Rate

{{returnData.totalInterestRate | percentage:2}}

Base Interest Rate

{{returnData.baseInterestRate | percentage:2}}

Bonus Interest Rate

{{returnData.bonusInterestRate | percentage:2}}

Total Interest Rate

{{returnData.totalInterestRate | percentage:2}}

Introductory Rate

{{returnData.introductoryRate | percentage:2}}

Introductory Term

{{returnData.introductoryTerm}}

Base Interest Rate

{{returnData.baseInterestRate | percentage:2}}

Term

{{returnData.term}}

Advertised Interest Rate

{{returnData.advertisedInterestRate | percentage:2}}

Interest Frequency

{{returnData.interestFrequency}}


Fees and Features

Ongoing Annualised Fee

{{returnData.annualFee}}

Upfront Fee

{{returnData.upfrontFee}}

Offset Account

Redraw

Principal & Interest

Interest Only

N/A{{returnData.interestOnly}}

Max loan to value ratio (LVR)

{{returnData.maxLVR | percentage:0}}

Lump sum repayments

N/A

Additional repayments

Maximum Loan Term

{{returnData.maximumLoanTerm}}

Upfront Fee

${{returnData.upfrontFee}}

Ongoing Monthly Fee

{{returnData.ongoingFees}}

Early Repayment Fee Applies

N/A

Vehicle Types

{{returnData.vehicleType}}

Maximum Vehicle Age

{{returnData.maximumVehicleAge}}

Pre Approval Available

N/A

Online Application

N/A

Account Keeping Fee

{{returnData.accountKeepingFee}}

Minimum Monthly Deposit

{{returnData.minMonthlyDeposit}}

Linked Account Required

N/A

Interest Calculated

{{returnData.interestCalculated}}

Interest Paid

{{returnData.interestPaid}}

Online Application

N/A

ATM

N/A

EFTPOS

N/A

Account Keeping Fee

{{returnData.accountKeepingFee}}

Minimum Monthly Deposit

{{returnData.minMonthlyDeposit}}

Linked Account Required

N/A

Interest Calculated

{{returnData.interestCalculated}}

Interest Paid

{{returnData.interestPaid}}

Online Application

N/A

ATM

N/A

EFTPOS

N/A

Minimum Deposit

{{returnData.minDeposit | currency : '$' : 0}}

Upfront Fees

{{returnData.upfrontFee | currency : '$' : 0}}

Annual Fees

{{returnData.annualFee | currency : '$' : 0}}

Notice Period to Withdraw

{{returnData.noticePeriodToWithdraw}}

Online Application

N/A

Automatic Rollover

N/A

Maturity Alert

N/A