Household wealth hit record high $14.9 trillion before RBA tightening

The Australian Bureau of Statistics (ABS) yesterday released household wealth data for the March quarter of 2022, which revealed that total household wealth increased by 1.2% ($173 billion) over the March quarter 2022 reaching a record $14,891 billion:

Australian household wealth

Record high household wealth in March quarter.

Total dwelling assets rose another 2.2% ($210 billion) over the quarter to a record high $9.7 trillion, whereas total financial assets fell 0.1% to $6.8 trillion.

The next chart, which comes from a separate Reserve Bank of Australia quarterly series, shows that Australian dwelling values hit a record high 644% of household disposable income in the March quarter, up from 500% in June 2020:

Australian housing valuation

Soaring housing values drove household wealth.

Per capita household wealth also rose by 1.1% over the March quarter to a record high $577,000, with per capita dwelling assets rising 2.1% to $377,000 and per capita financial assets falling 0.2% to $262,000:

Australian per capita wealth

Expensive housing delivers fake ‘wealth’ boom.

The above is obviously the high water market for household wealth given financial markets are tanking and house prices are rolling over amid rising interest rates.

Unconventional Economist

Comments

    • Fishing72MEMBER

      It’s trite to write this off as fiat currency shenanigans.

      Irrespective of whether you want to or not, you can sell your 1.5 million dollar West Sydney sh1tbox and use that money to buy real world items. You could use that ridiculously inflated valuation to buy yourself a hefty slice of property in another nation which hasn’t experienced the same degree of outrageous real estate inflation.

      It’s expected that people living in some arsehole-of-the-Earth suburb to complain that their house costs 1.5 million Aussie monopoly dollars but you can always weaponise that same abstract fiat currency to buy yourself a life of luxury elsewhere if you so desired.

      Dismissing prices as mere fiat currency abstraction and perversion misses the point that fiat currency has always been an illusion only made real by community participation in the game. As long as this social consensus to utilise fiat currency still exists any personal revelation that the whole scheme is a sham sounds a bit naïve.

      • Like anything tho the super high house valuations are unrealized gains. *Some* people can sell their 1.5M house and buy real stuff, but if a significant proportion tried to then the value would be driven waaay down.

  1. So, $15T wealth and $10T of housing ‘wealth’, much of which is debt, and is held up by new debt flows. Geez.

    I’m sure the same would also speak about the importance of diversification, but we’ve got almost all of our wealth in one asset class in one country…

  2. Its not real wealth, its merely the valuation of our wealth.

    Here in lies the rub. If property crashes, the wealth valuation (10T) crashes taking consumer spending and SMB with mortgages against their business, straight into a brick wall at 200km/h.

    “We’re all in this together, yeah we’re all in this together”.

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