As rates fall, Australians have never been wealthier
Australians have never been wealthier, with new data revealing the value of our bank accounts, homes and shares rose to record highs in 2020 despite the harsh economic impacts of COVID-19.
Total household wealth jumped by 4.3 percent or $501.5 billion to a record $12.03 trillion in the December quarter, the highest quarterly growth rate since the December quarter 2009, according to the Australian Bureau of Statistics. Household wealth rose 4.2 percent ($19,028) to a record $467,709 per person.
Head of Finance and Wealth at the ABS, Katherine Keenan, said the December quarter growth in wealth was driven by rising residential property prices, “reflecting record low interest rates, and government support programs such as the First Home Buyer and the HomeBuilder schemes, and pent-up demand from buyers.”
Net Australian household worth, or 65 percent, was made up of $7.78 trillion of property assets, a record $3.34 trillion of superannuation, and $1.12 trillion held in shares. Cash and term deposit holdings stood at a record $1.32 trillion, representing 21.6 percent of financial assets held by households. Shareholdings made up 18.3 percent of all financial assets, though that remains below the long-run average of 22.1 percent.
“Not only did household wealth hit record highs at the end of 2020, but the lift in wealth in the quarter was also the biggest recorded in 11 years. No wonder people are feeling more confident and spending,” said CommSec Chief Economist Craig James.
“Importantly, the value of houses and listed shares continue to rise, meaning fresh highs for wealth will be recorded this quarter (the first quarter 2021).”
Continue reading Morningstar contributor, Nicki Bourlioufas’s article… here.