Australia's households just keep getting richer.
Australian household wealth grew more in the last year than it did during the preceding three years combined.
Despite living through the first recession in almost three decades, household wealth in the year to March 31 increased by 15.3 per cent, the fastest rate since the middle of the mining construction boom in 2010.
The latest ABS stats showed that Aussie households added more than $500 billion to their wealth over the first three months of the year thanks to booming property prices, making Australians richer than ever before.
Total household wealth rose by 4.3 per cent to $12.6 trillion in the March quarter alone, driving per capita wealth to a record high of $492,000, according to the Australian Bureau of Statistics.
Late last year, the Australian Council of Social Service published a report showing the main components of wealth in Australia.
Using the latest available data from the Bureau of Statistics (for 2017-18), it showed the average wealth per household in Australia in 2018 was made up of:
- Main home (39 per cent)
- Superannuation (20 per cent)
- Shares and other financial assets (19 per cent)
- Investments in other real estate (12 per cent)
- Other non-financial assets (10 per cent)
Continued strength in the housing market boosted demand for new housing loans, particularly from owner-occupiers while investor loans recorded a second consecutive quarter of positive growth for the first time since December 2018.
Short-term borrowing fell as households repaid credit card debt incurred for retail spending during the December quarter.
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Australians also built up large savings reserves during the coronavirus pandemic, which policymakers hope they will draw down on to boost consumption and economic growth in the coming months.
The household saving-to-income ratio dipped to 11.6 per cent from 12.2 per cent in the March quarter and about 20 per cent at the height of the pandemic, but is still well above pre-pandemic levels of about 5.3 per cent.
A new report from Credit Suisse estimates as many as 1.8 million Australians are millionaires today based on net household wealth (defined as the value of financial and real assets minus debts).
And over 3 million Australian adults could soon be millionaires, according to the report.
In fact, Australians grew their net wealth through the COVID-19 pandemic more than any other country in the world, bar Switzerland, thanks to a strong recovery in Australia’s property and equity markets where most of us hold our wealth.
Source of graphic: Australian Financial Review
Australia also topped the rankings for median net wealth in 2020 and placed fourth in terms of mean wealth, according to Credit Suisse’s latest global wealth report.