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:
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:
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:
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.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
- Ex-Treasury economist jukes the falling wages stats - June 28, 2022
- Aussie business confidence tanks to pandemic levels - June 28, 2022
- It’s never been a better time to be a capitalist in Australia - June 28, 2022
YOU MAY ALSO BE INTERESTED IN
Ex-Treasury economist jukes the falling wages stats
Australia's wage price index growth was 2.35% in
Aussie business confidence tanks to pandemic levels
Australia's business confidence has begun to tank
It's never been a better time to be a capitalist in Australia
Regular readers will know that I have been
AEMO restores power "market", prices explode
The MSM is preoccupied with the latest culture
$14.9T of Fiat currency
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.
That’s as insane as the Japanese bubble period when one block around the Japanese Imperial Palace is worth more than all of California.
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…
Not that much debt actually. Of that 10T, its only about 2.7T in debt. 7.3T in ‘equity mate’.
And the spruiker’s tell us there is more land coming just around the corner. Unbelievable in its stupidity!
Did it include all the laundering?
https://www.smh.com.au/business/companies/from-casinos-to-houses-why-australia-remains-a-money-laundering-haven-20220622-p5avnd.html
Did it count all of our stuff? Just the value of hundreds of rolls of toilet paper stored in each of our garages must be worth noting.
So, totally ignoring debt, it’s the $XXX the house would sell for + $2.99 in cash that makes us so wealthy…
Wow!!
Crash it.
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”.