Record house prices continue to drive household wealth

Total household wealth increased 5.8 per cent ($735.0b) in the June quarter 2021 reaching a record $13,433.7b, according to figures released today by the Australian Bureau of Statistics (ABS). Wealth per capita rose to a record high of $522,032.

Residential property assets contributed 4.5 percentage points to the quarterly growth in household wealth, followed by superannuation balances and directly held shares, at 1.1 and 0.3 percentage points.

Head of Finance and Wealth at the ABS, Katherine Keenan said: “Growth in household wealth continued to be driven by residential property prices, which recorded the strongest quarterly growth on record (6.7 per cent). The strong property price growth reflected record low interest rates, rising consumer confidence and demand being greater than the levels of housing stock on the market.”

The deposit assets of banks with the Reserve Bank of Australia (RBA) increased to an unprecedented $341.8b, as the RBA injected further liquidity into the financial system in line with current monetary policy goals. The liquidity helped the quarterly growth of $26.0b (1.0%) in banks loan assets. Ms Keenan added: “Growth in owner occupier loan balances was the strongest in 5 years and consistent with ABS seasonally adjusted owner occupied loan commitments data, which reached new highs over the first 6 months of 2021.”

Deposit accounts with banks increased by $45.1b (1.7 per cent) to $2,704.2b. For the first time since the beginning of the pandemic private non-financial corporations drove the increase in deposits. These businesses kept their level of deposits steady in April and May, but increased them in June as lockdowns began in NSW. Households saw their weakest increase in deposits since June quarter 2019 due to increased household spending as the June quarter 2021 experienced fewer lockdown days across Australia.