Despite the pandemic household wealth rises 20%

Household wealth rose 5.8 per cent or $735 billion in the June 2021 quarter to a record high of $13.4 trillion.

And that's a time when population growth has stagnated.

As a result, the average net worth per capita has jumped by 20 per cent over the past year to $522,000.

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And there's more good news

The good news is that gearing ratios have moderated in sympathy with rising prices, and mortgage repayments have eased in the lower mortgage rate environment.

Meanwhile CBA economists estimate that during lockdowns households have socked away some $230 billion in excess savings, leading to a massive war chest of cash and deposits.

Six years ago American economist Scott Sumner predicted that the 21st century would be characterised by an unprecedented number of 'bubble' claims, due to a misunderstanding of the impact of low real interest rates on asset valuations.

And that's certainly been the case in housing, with headline-grabbing bubble calls ranging from the U.S. to Canada, to Australia, New Zealand, Germany, the United Kingdom, and a range of other countries besides, none of which have burst.

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About Pete Wargent Pete is a Chartered Accountant, Chartered Secretary and has a Financial Planning Diploma. Using a long term approach to building businesses, investing in equities, & owning a portfolio he achieved financial independence at the age of 33. Visit his blog