Off the back of a property market slowdown, wealth per capita fell 2.2% or $12,050 to $545,532 in the September 2022 quarter according to ABS data released Thursday.

Total household wealth fell for the second consecutive quarter, decreasing by 1.9% to just over $14.2 trillion

This was driven by weakness in the housing market - national housing values declined by 3.2% over the year to November.

However, the ABS reports household wealth grew by 0.7% through the year despite the two quarterly falls.

Head of Finance and Wealth at the ABS Katherine Keenan said residential property prices drove household wealth south.

“This fall in household wealth was almost entirely driven by the decrease in the value of residential land and dwellings, which recorded its largest decline since December 2008,” Ms Keenan said.

The ABS noted the softer fall in household wealth in the September quarter was due in part to an increase in household deposits, up 3.5% to $50.8 billion.

Households favoured placing excess funds in deposit accounts to take advantage of rising interest rates, particularly in term deposits.

“The record increase in household take up of term deposits coincided with increasing interest rates, and income tax returns,” Ms Keenan said.

Despite this, households have had to dip into their savings to keep up with cost of living pressures.

The household savings ratio declined to 6.9% in the September 2022 quarter, according to the ABS.

Household demand for credit softens

The ABS reports demand for credit slowed this quarter (down 50.4%).

A weakening appetite for housing credit is due to interest rate rises and inflationary pressures.

Households repaid $1.5b in short term loans as consumer spending fell amid Covid restrictions. This resulted in $28.0b of long term loan borrowings, partly offset by the $1.5b repayment of short term loans.


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Important Information and Comparison Rate Warning

All products with a link to a product provider’s website have a commercial marketing relationship between us and these providers. These products may appear prominently and first within the search tables regardless of their attributes and may include products marked as promoted, featured or sponsored. The link to a product provider’s website will allow you to get more information or apply for the product. By de-selecting “Show online partners only” additional non-commercialised products may be displayed and re-sorted at the top of the table. For more information on how we’ve selected these “Sponsored”, “Featured” and “Promoted” products, the products we compare, how we make money, and other important information about our service, please click here. Rates correct as of . View disclaimer.

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