Household wealth increased 0.2 per cent in the March quarter 2019 to $10,242.6 billion, after a fall of 2.1 per cent in the previous quarter, according to figures released by the Australian Bureau of Statistics (ABS) today. The highest ever figure for household wealth was recorded in the September quarter 2018 ($10,422.3 billion).
The increase in household wealth in the March quarter was driven by real (inflation adjusted) holding gains on financial assets, offset by holding losses on residential real estate.
Chief Economist for the ABS, Bruce Hockman, said: “Residential real estate experienced its fifth consecutive quarter of real holding losses. However, household wealth per person fell by only $1,500 to $404,566 per person in the March quarter reflecting the impact of the rebound in the share market coming mainly through household superannuation reserves.”
The ratio of mortgage debt to residential real estate assets was 29.0, up from 28.1 in the previous quarter, indicating that mortgage debt grew faster than the value of residential real estate owned by households. The rise reflects falling residential property prices rather than strong growth in mortgage debt. This was the strongest quarterly increase in the ratio since the September quarter 2011 and the ratio is now at its highest level since the June quarter 2013.
The figures released today also show that Australia’s national investment declined $22.2 billion during the quarter to $100.9 billion. Mr Hockman noted that “the fall comes off the back of a record high last quarter of $123.1 billion.” Mr Hockman added that “despite the decline national investment remains at high levels, driven by public infrastructure investment, particularly investment by state and local general government.”
Australia continued to borrow from overseas to fund investment, borrowing $1.0 billion from non-residents during the March quarter as national investment exceeded national saving. In seasonally adjusted terms, Australia has been a net borrower from overseas since the September quarter 1975.