Household wealth still below GFC levels

Courtesy of Mark the Graph.

Today the ABS released the March quarter financial accounts. My favourite table in this series is the household sector.

Net household financial wealth is still down on its pre-GFC highs.

Housholds are continuing to be cautious with their assets (favouring cash depositis over shares). Although, this trend might be turning a corner.

 

No surprises on the liabilies side.

 

David Llewellyn-Smith
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Comments

  1. I’m guessing the obvious upswing in the gradient of “Household Sector: Gross Financial Liabilities” chart at about year 2000 was the result of halving CGT.
    This was the green light for speculators, pretending to be investors, to gamble on sale of 2nd hand property to one another at ever more inflated prices.
    Original intention of halving CGT was to encourage business growth.
    Instead we got debt growth.

    • …which implies that the easiest way to improve Newt Wealth ( graph 1) is to reduce the red liability line – reduce borrowings. But I guess that’s not feasible as the household borrowings now support everyday life….unless we see a reduction in the standard of living, of course!

  2. Wow. $1.5TRILLION!! Greek government owes less than Australian households.

    Don’t get everyone talking about how we are saving and deleveraging but debt levels going up. I guess credit issuing growth has dropped but is still positive. Wonder if it can stay positive with this level of debt.

    • It looks a lot on the chart but the $1.5t debt is not held against the financial assets they are depicted against in the chart. They are held against ~$4.5T real assets, which are not included in the chart.

  3. This is only as at 31 March when ASX200 was at 4300. Super and Shares got a smackdown in the second quarter.

  4. I’ve now heard the MSM talking about rehypothecation and shadow banking, as well as PMs and total global derivatives. This might just be the contrarian corner.

    Or the boomers are about to realise how shabby the global finance system is and freak out completely…

  5. Isn’t super, 40%+ or thereabouts exposed to shares?

    Cant believe anyone 10 years or less from retirement would be exposed to equities, it basically takes out of your hands the decision as to WHEN you get to retire.

    • MsSolarFelineAU

      *Isn’t super, 40%+ or thereabouts exposed to shares?*

      Correct. The average “mum & dad” investor has been brainwashed by the MSM & financial planners etc (thinking of my dear Mum here) to believe that Super(annuation) is all that they need to survive in their twilight years…

      To be _truly_ weathy, one does need to think outside the paradigm.

      That is why this site exists (as well as zerohedge 😉 You are *not* really the famous Tyler Durden, are you? )

  6. I don’t think I’m being pedantic to point out that the title is not true. Household wealth, both net and gross, is actually above the pre GFC level. The title is not supported by the charts which deal only with financial wealth. Household wealth includes both financial assets and real assets, mainly houses.
    Net household wealth is found in RBA table B20 by adding columns B, C and I and subtracting column J.