Home price surge drives net wealth growth to 12-year high

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on September 23, 2021
Home price surge drives net wealth growth to 12-year high

New data shows wealth per capita increased 5.6%, or $27,782, to $522,032 per person, largely aided by an increase in home prices.

The June 2021 quarter recorded the largest quarterly growth since December 2009, which was the peak of the recovery from the global financial crisis.

Household wealth was largely driven by continued strength in the housing market and holding gains in financial assets.

For the June quarter land and dwellings rose by a collective $576.5 billion.

Financial assets of households rose 3.3% ($206.1 billion), driven by a $140.8 billion rise in superannuation reserves, and a $34 billion rise in shares and other equity.

Growth in these assets was driven by revaluation gains, reflecting the positive performance of domestic and overseas share markets.

"The strong property price growth reflected record low interest rates, rising consumer confidence and demand being greater than the levels of housing stock on the market," said Katherine Keenan, ABS' head of finance and wealth.

"Growth in household wealth continued to be driven by residential property prices, which recorded the strongest quarterly growth on record - 6.7%.

"Growth in owner occupier loan balances was the strongest in five years and consistent with ABS seasonally adjusted owner occupied loan commitments data, which reached new highs over the first six months of 2021."

Image by Jay Wennington via Unsplash

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Aaron joined Savings.com.au in 2021. He is a finance journalist with a keen interest in property, the share market, and improving financial literacy in young Australians.

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