5232.0 - Australian National Accounts: Finance and Wealth, Dec 2016 Quality Declaration 
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 30/03/2017   
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Amount outstanding at end
Transactions during
Other changes in volume during (a)
Holding gains (+)/losses (-) during
Amount outstanding at end
Sep Qtr 2016
Dec Qtr 2016
Dec Qtr 2016
Dec Qtr 2016
Dec Qtr 2016

Non-financial assets
Land and dwellings
6 147.5
6 414.4
Other non-financial assets
Financial assets
4 580.5
4 670.4
2 271.1
2 305.7
Net worth
9 076.4
9 404.5
Memorandum item
Consumer durables (b)

- nil or rounded to zero (including null cells)
(a) Not all other changes in volume are separately identifiable. Some have been shown as holding gains.
(b) Consumer durables are not included in net worth.

At the end of December quarter 2016, household net worth was $9,404.5b, comprised predominantly of Land and dwelling assets, Financial assets and Liabilities. During the quarter, household net worth increased by $328.1b, driven by real holding gains of $253.9b. Real holding gains on net worth were largely driven by Land and dwellings.

Transactions contributed $21.0b to net worth, driven by financial assets, in particular equity reserves of pension funds and deposits. Transactions in liabilities were driven by long term loans and other accounts payable, which were partially offset by maturities in short term debt securities.

Graph 1. Components of Household balance sheet
Graph Image for Graph 1. Components of Household balance sheet

Household assets outgrew liabilities during December quarter 2016, resulting in a 3.6% quarterly growth in household net worth. Growth in net worth has been primarily driven by holding gains for the past 14 quarters. In December quarter 2016, holding gains contributed 91% of total growth in net worth for the quarter, the largest contribution to growth since March 2015.

Household residential land and dwellings grew by 4.5% in December quarter 2016. This is the largest percentage increase since March 2010. Households non-residential land and dwellings assets grew by 1.9% in December quarter 2016.


Graph 2. Interest payable to income ratio
Graph Image for Graph 2. Interest payable to income ratio

The interest payable to income ratio represents the proportion of household gross disposable income that is required to meet interest payments. Interest payable in the graph is the "un-adjusted interest payable". It includes financial intermediation services indirectly measured (FISIM) on dwelling loans plus dwelling interest payable from the household income account. It therefore represents the total nominal amounts of interest paid by the household sector. The interest payable to income ratio is relatively volatile in the short term, however long term trends may be observed. The interest payable to income ratio at December quarter 2016 increased to 10.1%, from the September quarter ratio of 9.9%. This indicates that the proportion of household gross disposable income required to meet interest payments increased slightly in the December quarter.

Graph 3. Gearing ratios
Graph Image for Graph 3. Gearing ratios

The mortgage debt to residential land and dwellings ratio declined 0.7 percentage points in December quarter 2016 to 26.7%, indicating that the value of residential real estate owned by households grew faster than mortgage debt.

The debt to assets ratio gives an indication of the extent to which the overall household balance sheet is geared. That is, the degree to which assets are dependent on debt. The debt to asset ratio was 19.7% at 31 December 2016.

The debt to liquid assets ratio reflects the ability of the household sector to extinguish debts in a short period of time using their readily available, or liquid assets. The following are classified as liquid assets: currency and deposits, short and long term debt securities, and equities. The ratio of household debt to liquid assets decreased from 125.5% at 30 September 2016 to 124.4% at 31 December 2016, indicating holdings of liquid assets outgrew liabilities during the quarter. The growth in liquid assets was driven by increases in deposits and equities.


Graph 4. Household net saving
Graph Image for Graph 4. Household net saving

Household net saving was $12.3b in December quarter 2016, decreasing from $28.7b in September quarter 2016. With the inclusion of other changes in real net wealth, commonly known as the wealth effect, net saving increased from $185.2b to $274.5b in December quarter 2016, largely due to real holding gains on land and dwelling assets and financial assets.

Graph 5. Gross disposable income
Graph Image for Graph 5. Gross disposable income

The addition of other changes in real net wealth (wealth effect) to household disposable income of $262.2b, increased household income to $558.8b in December quarter 2016. This is the strongest quarterly wealth effect since December quarter 2009.