Household wealth continues to rise

According to recent Australian Bureau of Statistics (ABS) data, household wealth climbed 2.4 per cent ($4.1 billion) in the quarter, reaching a total of $16.9 trillion.

This is reportedly the eighth consecutive quarter to see an increase, highlighting stability across the country.

The total household wealth figure is 9.9 per cent ($1.5 trillion) higher than the same period in 2023, with residential land and dwellings recognised as the largest driver of the rise, contributing 0.9 percentage points to the overall 2.4 per cent rise in household wealth.

According to Dr Mish Tan, ABS head of finance statistics, strong superannuation trends are also helping to contribute to this solid wealth.

“Household wealth continues to be supported by rising house prices despite recent moderation in growth. Strong performances in domestic and overseas share markets contributed to the growth in household superannuation balances this quarter,” Tan said.

During the September quarter, household deposits increased by 3.7 per cent ($61.5 billion), driven by a higher household savings ratio. This growth was supported by a rise in gross disposable income, which outpaced household spending.

The increase in disposable income, fuelled by higher household earnings and the introduction of Stage 3 tax cuts, contributed to significant growth in transferable deposit balances, especially in mortgage offset accounts.

Strong share market performance in the September quarter led to a 3.5 per cent ($137.4 billion) increase in superannuation assets, contributing 0.8 percentage points to the quarterly growth in household wealth.

Additionally, the rise in the superannuation guarantee from 11 per cent to 11.5 per cent during the quarter further boosted superannuation balances through higher employer contributions.

Meanwhile, total demand for credit was $113.3 billion, driven by private non-financial businesses ($44.7 billion), general government ($44.6 billion), and households ($19.2 billion).

Higher government spending in the quarter was driven by increased public investment and policy initiatives aimed at providing cost-of-living relief to households, such as the Energy Bill Relief Fund. At the same time, the implementation of Stage 3 tax cuts led to a reduction in taxation receipts.

Tan added: “Commonwealth government issuance of Treasury bonds was the highest since September quarter 2020, driven largely by increased funding requirements.”

Jack Campbell is the editor of Broker Daily. After graduating from the University of Wollongong in 2022, Jack began his journalistic career working on Broker Daily’s sister brand, HR Leader. In August 2023 he was made the news editor and worked alongside some talented journalists writing articles and recording podcasts.

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