Save
Analysis: How household wealth is faring for Australians
The property slump combined with unusual rate moves from Australia’s lenders have contributed to a drop in household wealth, according to a national research house.
Analysis: How household wealth is faring for Australians
The property slump combined with unusual rate moves from Australia’s lenders have contributed to a drop in household wealth, according to a national research house.
According to ABS data, the value of total household assets fell 1.6 per cent to $12.6 trillion over the two quarters to December 2018.
The fall in the value of household assets coincided with a 1.5 per cent rise in the value of household liabilities, which totalled $2.4 trillion as at December 2018.
This brings household wealth to its lowest level since September 2017.
Why the dip?
A combination of household debt, income and asset value are contributing to these figures.
“While debt levels are quite high, the ratios of asset value to disposable income are much higher,” said CoreLogic research analyst Cameron Kusher.
“While that may be the case, it is important to understand that if asset values fall, the value of the debt typically doesn’t reduce at the same speed, which can lead to asset value erosion,” he said.
According to CoreLogic’s analysis, assets were 927.9 per cent of disposable incomes as at December 2018, declining from a peak of 962.1 per cent in December 2017 off the back of falls in dwelling values.
Accordingly, the ratio of housing assets to disposable income dropped from its peak of 529.7 per cent in December 2017 to 495.3 per cent, which CoreLogic assessed was the lowest since September 2016.
What the future holds
Mr Kusher expects the ratio of assets to disposable incomes to continue falling as housing market weakness persists.
“Although most households will likely remain in a position whereby the value of their assets is significantly higher than their debt, no doubt an increasing number of recent property purchasers will have higher levels of debt than the value of their asset.”
“This is probably an area of most concern for the RBA. If this leads to reduced consumer expenditure and, in turn, slower economic growth, it may be a trigger for either lower official interest rates or changes to mortgage lending policies (or both).”
Check out Nest Egg's property pages for all the latest data, analysis and strategy on the Australian property market.
Expenses
Morrison backs big pharma, turns back to developing countries
Big pharma is currently fighting to maintain intellectual property protections over COVID-19 vaccines, with Australia refusing to act despite having no pharmaceutical companies. ...Read more
Expenses
Half-price flight scheme launches today
Aussies are being offered half-price flights as the government looks to spur domestic travel to regions it has defined as key to economic recovery. ...Read more
Expenses
Insurance prices rise despite payout falls
The COVID-19 pandemic has seen insurer payouts fall by $500 million, but Australian consumers are continuing to pay more, the consumer watchdog has revealed. ...Read more
Expenses
CBA cops civil proceedings for overcharged interest
ASIC has commenced civil penalty proceedings in the Federal Court against the Commonwealth Bank over the bank charging an interest rate on business overdraft accounts that was substantially higher tha...Read more
Expenses
What are the top 10 most expensive cities in the world?
Logistical issues and currency fluctuations caused by the COVID-19 pandemic has seen the most expensive cities in the world drastically change, new research has revealed. ...Read more
Expenses
Sydney adviser pleads guilty to misappropriating $2.9m
A Sydney financial adviser has pleaded guilty to misappropriating $2.9 million in his clients’ funds. ...Read more
Expenses
Telstra set to refund 10,000 customers
Ten thousand past and present Telstra customers are entitled to a refund due to being overcharged a total of $2.5 million. ...Read more
Expenses
iSelect in hot water for energy plan comparisons
Comparison tool iSelect has been ordered to pay $8.5 million in penalties for making false and misleading representations about its electricity comparison service. ...Read more
The Olympic effect on property and equity investors; COVID-19 Disaster Payments and super
Listen now
Do lockdowns boost property prices? Are short-sellers levelling the playing field? Did you lodge your tax returns early?
Listen now
Will lockdowns halt the housing boom? Is the metaverse taking over? And the cons of lodging your tax returns early
Listen now
Are you being priced out of the market? Have you got the Tuesday blues? And are you ready for the upcoming super changes?
Listen now
Expenses
Morrison backs big pharma, turns back to developing countries
Big pharma is currently fighting to maintain intellectual property protections over COVID-19 vaccines, with Australia refusing to act despite having no pharmaceutical companies. ...Read more
Expenses
Half-price flight scheme launches today
Aussies are being offered half-price flights as the government looks to spur domestic travel to regions it has defined as key to economic recovery. ...Read more
Expenses
Insurance prices rise despite payout falls
The COVID-19 pandemic has seen insurer payouts fall by $500 million, but Australian consumers are continuing to pay more, the consumer watchdog has revealed. ...Read more
Expenses
CBA cops civil proceedings for overcharged interest
ASIC has commenced civil penalty proceedings in the Federal Court against the Commonwealth Bank over the bank charging an interest rate on business overdraft accounts that was substantially higher tha...Read more
Expenses
What are the top 10 most expensive cities in the world?
Logistical issues and currency fluctuations caused by the COVID-19 pandemic has seen the most expensive cities in the world drastically change, new research has revealed. ...Read more
Expenses
Sydney adviser pleads guilty to misappropriating $2.9m
A Sydney financial adviser has pleaded guilty to misappropriating $2.9 million in his clients’ funds. ...Read more
Expenses
Telstra set to refund 10,000 customers
Ten thousand past and present Telstra customers are entitled to a refund due to being overcharged a total of $2.5 million. ...Read more
Expenses
iSelect in hot water for energy plan comparisons
Comparison tool iSelect has been ordered to pay $8.5 million in penalties for making false and misleading representations about its electricity comparison service. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
