Household wealth hits record high, yet social groups flag growing inequality

author-avatar By on December 17, 2020
Household wealth hits record high, yet social groups flag growing inequality

The latest data indicates household wealth has hit a record high, yet a social group has warned of the growing inequality in Australia.

The latest Australian Bureau of Statistics (ABS) data points to a 1.7% increase over the September quarter to a record high collective household wealth of $11.4 billion.

Residential assets increased 1.2%, deposits 5.4%, and superannuation balances were up 1.1%.

Average household wealth increased 1.6% to $441,649 per person, and a large amount of it is tied up in housing, with asset values collectively rising $86.8 billion.

Buying a property or looking to refinance? The table below features home loans with some of the lowest variable interest rates on the market for owner-occupiers.

Lender
Advertised rate Comparison rate Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval
VariableMore details
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  • For purchase and refinance, min 20% deposit
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VariableMore details
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  • For a chance to win $100K towards your home loan, apply with Athena before Oct 31 & be approved by Dec 15
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
VariableMore details
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Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

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Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

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  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^
VariableMore details
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Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
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100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services

Rates correct as of September 25, 2021. View disclaimer.

However, the Australian Council of Social Service (ACOSS) has flagged growing inequality, with the wealthiest 20% having 90-times the wealth of the poorest 20%. 

The latest research from ACOSS in conjunction with the University of NSW shows the highest 10% of households by wealth also owns nearly half of all household wealth, and ACOSS CEO Cassandra Goldie said the inequality was "stark".

"While the Government did increase income support at the beginning of the crisis, which greatly reduced poverty for a time, it is now threatening to cut income support back to the brutal old Newstart rate," she said.

"The prospect that high levels of wealth inequality may become entrenched after the pandemic is also concerning, as high income-earners save more of their income and investment returns and house prices pick up again, ahead of growth in wages."

However, average wealth is at a record high, according to ABS head of finance and wealth Amanda Seneviratne.

"The September quarter 2020 financial accounts reflected improvements in the Australian and global financial markets, as well as a partial recovery of the domestic economy in response to government and RBA policies, and easing social restrictions across most of Australia,” she said.

Asset values recouped the losses seen in the June quarter, and demand for credit hit a record $154.9 billion - up $3.8 billion on the last quarter.

The ABS also cites JobKeeper, extra welfare payments, and early access to super, as well as tax refunds, as continuing reasons for elevated wealth levels.

The household savings ratio remained elevated throughout most of 2020.

Finding 'good' jobs

UNSW professor Carla Treloar pointed to the problem of finding and restoring full-time jobs.

“While the number of part-time jobs has recovered to its pre-COVID level, so far only one third of full-time positions have been restored. This will exacerbate income inequality as government income supports are wound back,” she said.

This coincides with the latest jobs data indicating the unemployment level fell 20 basis points to 6.8% in November.

Youth unemployment was also 15.6%, and underemployment fell one percentage point to 9.4%.

Approximately 183,000 full-time jobs were added in the past two months, which accounted for two thirds of the employment increase over the period.


Photo by Louis Hansel @shotsoflouis on Unsplash

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Harrison is Savings.com.au's Assistant Editor. Prior to joining Savings in January 2020, he worked for some of Australia's largest comparison sites and media organisations. With a keen interest in the economy, housing policy, and personal finance, Harrison is passionate about breaking down complex financial topics for the everyday consumer.

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