Household wealth hits a record high

Total household wealth increased 1.7 per cent to a record high of $11,351 billion, according to figures released today by the Australian Bureau of Statistics (ABS).

Head of Finance and Wealth at the ABS, Amanda Seneviratne said “The September quarter estimate surpassed the previous high of $11,248 billion recorded in December quarter 2019, prior to the COVID-19 pandemic.”

Increases in residential assets (1.2 per cent), deposits (5.4 per cent), and superannuation balances (1.1 per cent) were the main contributors to the growth in household wealth. Average household wealth increased 1.6 per cent (up $6,850) to $441,649 per person in the September quarter, similar to the growth of 1.5 per cent recorded in the June quarter. A 0.1 per cent increase in the population was the reason total wealth grew marginally more than average wealth.

"The September quarter 2020 financial accounts reflected improvements in the Australian and global financial markets, as well as a partial recovery of the domestic economy in response to government and RBA policies, and easing social restrictions across most of Australia,” Ms Seneviratne said.

Residential assets rose $86.8 billion, recouping the losses experienced in the June quarter. Holding gains of $73.6 billion on residential assets reflected a rebound in property prices as social distancing measures (restrictions on auctions and open house inspections) eased and economic conditions began to improve.

Household deposits increased a record $63.7 billion as households continued to save at elevated levels during the September quarter. Continuing government income support packages such as JobKeeper, economic support payments, and early access to superannuation were key drivers of the increase in deposits. This was in addition to the normal increase in deposits in September quarters due to tax refunds.

Demand for credit through financial intermediaries and markets was a record $154.9 billion. Commonwealth and state governments continued to raise significant amounts of funds to finance COVID-19 policies for the September quarter and beyond, resulting in net borrowing increasing by $21.4 billion to $118.0 billion. This was the largest quarterly borrowing on record for general government, surpassing the $96.6 billion in the June quarter, and was financed mainly through the bond markets.