5232.0 - Australian National Accounts: Finance and Wealth, Jun 2017 Quality Declaration 
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 28/09/2017   
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Amount outstanding at end
Transactions during
Other changes in volume during (a)
Holding gains (+)/losses (-) during
Amount outstanding at end
Mar Qtr 2017
Jun Qtr 2017
Jun Qtr 2017
Jun Qtr 2017
Jun Qtr 2017

Non-financial assets
Land and dwellings
6 556.3
6 699.8
Other non-financial assets
Financial assets
4 773.9
4 836.1
2 338.8
2 397.2
Net worth
9 621.8
9 773.1
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 June quarter 2017, household net worth was $9,773.1b, comprised predominantly of $6,699.8b of land and dwelling assets, $4,836.1b of financial assets and $2,397.2b of household liabilities. During the quarter, household net worth increased by $151.3b, driven by holding gains of $128.9b. Holding gains on net worth were largely driven by land and dwellings.

Net transactions contributed $14.4b to household net worth, made up of financial assets, of which $54.8b was equity reserves of pension funds and $3.6b in equity holdings of other private non-financial corporations, offset by long term loan borrowings of $36.7b.

Graph 1. Components of Household balance sheet

Graph Image for Graph 1. Components of Household balance sheet

Household assets outgrew liabilities during June quarter 2017, resulting in a 1.6% quarterly growth in household net worth. Of the 1.6% increase in net worth this quarter, holding gains contributed 1.3% points to the growth.

The value of household residential land and dwellings was the largest contributor to growth and grew 2.2% in June quarter 2017, this was greater than the 1.4% growth seen in March quarter 2017. Financial assets were the next largest contributor to growth in household net worth increasing by 1.3% ($62.2b). The driver of growth for financial assets was household’s net equity in reserves in pension funds excluding unfunded superannuation (4.5% or $97.6b). The increase in net equity reserves in pension funds excluding unfunded superannuation was driven by households response to the legislative changes to superannuation that took effect on the 1st July 2017.


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, consumer debt and unincorporated enterprises plus the corresponding interest payable for each of these series. 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 June quarter 2017 increased to 11.1%, from the March quarter ratio of 10.9%. This indicates that the proportion of household gross disposable income required to meet interest payments increased slightly in the June quarter.

Graph 3. Gearing ratios

Graph Image for Graph 3. Gearing ratios

The mortgage debt to residential land and dwellings ratio shows the extent to which household residential real estate assets are geared. The ratio declined 0.1 percentage points in June quarter 2017 to 26.4%, 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 has grew this quarter by 0.1 percentage points to 19.7% at end of June quarter 2017.

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 increased from 123.6% at 31 March 2017 to 126.7% at 30 June 2017, indicating holdings of liquid assets grew slower than liabilities during the quarter. The growth in liabilities was driven by increases in loans borrowings during the quarter.


Graph 4. Household net saving

Graph Image for Graph 4. Household net saving

Household net saving was $4.8b at 30 June 2017, decreasing from $9.3b at 31 March 2017. This is the lowest household net saving since June quarter 2008 and the third consecutive quarterly decrease. With the inclusion of other changes in real net wealth, commonly known as the wealth effect, net saving decreased from $155.7b to $46.0b in June quarter 2017. The slowdown in growth of real holding gains on land and dwelling assets ($59.9b) compared to March quarter 2017 and the negative real holding gains of financial assets (-$49.2b) were the main drivers of the decrease in June quarter 2017.

Graph 5. Gross disposable income

Graph Image for Graph 5. Gross disposable income

Gross disposable income ($281.8b) increased 0.6% or $1.8b during the quarter. The addition of other changes in real net wealth (wealth effect) to household disposable income of $41.2b, increased household income to $323.0b at end of June quarter 2017.