Household wealth rose for the third straight quarter.
Yes, it is up 2.6 per cent ($379 billion) in the June quarter of 2023, according to the latest figures released by the Australian Bureau of Statistics (ABS).
Dr Mish Tan, ABS head of finance statistics, said:
“Household wealth has grown alongside increasing house prices this year.
Population growth has supported demand for housing while the supply of new and established dwellings to the market remained constrained.”
According to ABS data, superannuation assets also contributed 0.3 percentage points to the June quarter’s household wealth growth.
Superannuation balances were supported by strong performance in overseas share markets, elevated employer contributions in a strong labour market and an expected seasonal increase in post-tax contributions.
Despite an improvement in the household balance sheet, there were signs that household budgets were under strain in the June quarter
ABS data notes that household deposit accounts shrank by $6.0 billion, the first quarterly decline since June quarter 2007.
This was driven by an $18.0 billion decrease in transferable deposits, partly offset by a $12.0 billion increase in non-transferable deposit accounts such as savings and fixed-term deposits.
The largest driver of the fall in household deposits was from unincorporated businesses.
“This was the first fall in deposit balances since the Global Financial Crisis and indicates that the household sector was tapping into cash reserves amid rising cost pressures,” Dr Tan said.
She commented further:
“This was consistent with a falling household saving ratio which is at its lowest level since June quarter 2008.
Higher interest rates and income tax payable, paired with high consumer inflation, has reduced households’ savings buffers.”
Total demand for credit of $38.1 billion was the weakest since the June quarter of 2005
This is driven by households ($37.7 billion) and state and local general government ($10.2 billion).
Private non-financial businesses’ demand for credit was $851 million, while the Commonwealth government repaid $15.7 billion of its debt.
The Commonwealth government’s cash balance improved due to record receipts from income and corporate taxes, which reduced their need to raise new debt. $11.8 billion of Treasury bonds and $4.1 billion of short-term debt securities matured during the quarter as the Commonwealth government repaid creditors.
