Since hitting a low point in February 2016, Australian equity prices have “been on an upward march”, despite some parts of the markets suffering bouts of price volatility, the company said.

“Company earnings in aggregate have been improving, but increasing valuation multiples have also driven prices higher,” State Street Global Advisors said.

While this is a positive, the company cautioned that the “local consumer is facing something of a squeeze” given the cost of living has steadily grown as wage growth continues to stall.

“In fact, the Reserve Bank of Australia recently pointed out that the growth in housing credit continues to outpace income growth, and household debt to disposable income continues to reach new highs,” State Street Global Advisors said.

This combination reduces the average household’s available disposable income and puts pressure on some parts of the markets as a result.