House prices drive household wealth to record highs
Total household wealth increased 4.4 per cent ($590.0b) in the September quarter 2021 reaching a record $13,918.5b. Wealth per capita also rose to a record high of $540,179 according to figures released today by the Australian Bureau of Statistics (ABS).
Residential property assets contributed 3.5 percentage points to the quarterly growth in household wealth. Increases in currency and deposits, and superannuation balances, at 0.6 and 0.4 percentage points also contributed to the growth in household wealth. Offsetting these was an increase in household loans which detracted 0.3 percentage points from growth.
Head of Finance and Wealth at the ABS, Katherine Keenan said: “Residential property prices continued to drive household wealth, with prices increasing by 5.0 per cent during the quarter. Lockdown restrictions in New South Wales, Victoria and the Australian Capital Territory reduced auction volumes and property listings in those markets. Overall, however, property prices continued to grow strongly reflecting continued low interest rates and strength in the housing market.”
The $72.0b increase in household deposits is the largest on record, surpassing the $63.8b recorded in the September quarter 2020. Ms Keenan said “Household disposable income increased during the quarter due to Government support payments to households and unincorporated businesses affected by COVID-19. Dividend payments and tax refunds also increased with some individuals able to claim additional refunds related to the backdating of personal income tax bracket adjustments to 1 July 2020. At the same time, household expenditure fell as households in New South Wales, Victoria and the Australian Capital Territory spent more than half the quarter under lockdown restrictions.”
“Demand for credit across the whole economy was $126.3b, led by general government, (up $46.9b), followed by households, (up $37.4b) and private non-financial business, (up $33.1b). Ms Keenan said ”The general government's funding requirements grew in the September quarter as New South Wales, Victoria and the Australian Capital Territory governments supported their economies through business support payments during lockdowns The Commonwealth government also supported household incomes in these jurisdictions through COVID-19 Disaster Payments.”
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