- The ABS has reported a record wealth per capita in Australia
- This comes after a strong March quarter this year
- Strong growth in residential property prices have stimulated the growth
According to figures released by the Australian Bureau of Statistics (ABS) wealth per capita (person) in Australia rose to a record high of $492,055 in the March quarter this year.
Driven largely by rising residential property prices, the total household wealth increased 4.3% in the first quarter of 2021, reaching the total household wealth figure of $12,664.5 billion.
The Head of Finance at the ABS, Kathrine Keenan, broke down the drivers of growth.
“Residential assets contributed 3.5 percentage points to the quarterly growth in household wealth, followed by superannuation balances and directly held shares, at 0.6 and 0.2 percentage points.
“Growth in household wealth continued to be driven by rising residential property prices”
Kathrine Keenan, ABS Head of Finance
Ms. Keenan says the growth reflects “…record low interest rates, support through a range of government incentives and recovery in the labour market.”
“Household wealth grew more in the last year than it did during the preceding three years combined. Over the three years prior to March 2020, household wealth grew 11.4 per cent.”
In the current uncertain climate, there is a savings mood among Aussies. Deposit assets (or total cash) held by banks rose to an unprecedented $304.5 billion in the March quarter. The mood is also reflected in recent research by Finder reporting that 35% of Australians plan on saving their tax refunds this year.
The high levels of deposit assets are also likely linked to the Reserve Bank of Australia (RBA) injecting liquidity into the financial system. This is consistent with current expansionary monetary policy goals, trying to get the economy roaring along, in order to lower unemployment below 5% and increase wage inflation.