The facts are in, the average Australian is getting richer.
Australian total household wealth (net worth) rose by a record $735 billion or 5.8% to record a high of $13,433.7 billion in the June quarter.
Despite all the challenges Covid has thrown at us wealth is up 19.7% on a year ago – the strongest annual gain in over 11 years.
Average (per capita) household wealth rose by $27,782 or 5.6% in the June quarter to a record high of $522,032 – up 20.3% over the year.
In fact, Australian households have never been wealthier.
The twin effects of rising home prices and superannuation balances propelled net household wealth and wealth per person to record highs.
A recent report by Credit Suisse estimates that as many as 1.8 million Aussies are considered to millionaires today, based on estimates of net household wealth.
And the number of Australian millionaires is expected to grow to 3,100,000 by 2025.
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How is household wealth measured?
Net household wealth is estimated by the ABS by taking the difference between the value of a household's total assets and its liabilities or debts.
So when household wealth increases, this refers to an overall lift in the value of household assets including residential and investment properties, superannuation balances, shares, and other financial asset, personal savings or bank deposits, and non-financial assets like artwork.
Of course, we know that during the last couple of years wages and salaries growth has been minimal.
On the other hand, those who owned income-producing assets such as residential real estate or shares have seen a significant increase in their net wealth.
There is nothing new about this…
You can't save your way to wealth through your income.