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Residential dwelling prices drive up household wealth: ABS

Residential dwelling prices drive up household wealth: ABS
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Growth of total household wealth accelerated in the December 2023 quarter, the ABS has revealed.

Recent figures released by the Australian Bureau of Statistics (ABS) have revealed that household wealth rose for the fifth consecutive quarter, up 2.8 per cent ($419 billion) in the December 2023 quarter.

Residential land and dwellings were the largest contributors to the rise of total household wealth (1.2 per cent), which rose to $15.7 trillion in this period, 7.8 per cent higher ($1.1 trillion) than the same quarter in 2022.

The annual and quarterly rise has marked an acceleration from the September 2023 figures, which rose by 7 per cent ($998 billion) year on year, and 2.3 per cent from the June quarter 2023.

ABS head of finance statistics Mish Tan said: “Household wealth saw a large boost from rising values of assets this quarter. House prices continued to grow significantly, as did domestic and overseas sharemarkets.”

Indeed, the latest figures from CoreLogic and PropTrack revealed that national home prices have continued to reach record highs with each passing month.

CoreLogic’s Home Value Index (HVI) showed that home values rose 0.6 per cent during the month of March in the 14th consecutive month of price growth, while values rose 1.6 per cent over the March quarter 2024, adding around $12,000 to dwelling values.

PropTrack’s Home Price Index also recorded a price peak in March, with prices increasing by 0.34 per cent and up 1.57 per cent in the year so far. Home prices are now 6.79 per cent above levels recorded in March 2023.

CoreLogic research director Tim Lawless and PropTrack senior economist Eleanor Creagh both attributed Australia’s housing undersupply and the ongoing demand to the rise in home values.

Strongest demand for credit in over a year

Meanwhile, the ABS also showed that the total demand for credit rose to $105.1 billion (up from $90.2 billion during the previous quarter), marking the strongest level of demand for credit since the September 2022 quarter.

Households were the most significant contributor to credit demand, borrowing $33.2 billion during the December 2023 quarter, $32.5 billion being in long-term loans.

Household short-term loans also increased to $0.7 billion, typically in line with seasonally higher consumer spending during this quarter.

Tan stated: “Household borrowing reflected continuing demand for housing amid strong population growth. A seasonal boost from spring housing market sales also drove household borrowing in the December quarter.”

[RELATED: Housing undersupply continues to boost prices]

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