The Australian Bureau of Statistics (ABS) has released household finance & wealth data for the September quarter.
The ABS revealed that total household wealth declined by $276 billion (-1.9%) over the quarter, driven by a $343 billion (-3.6%) decline in the value of housing assets:
Household wealth was also down $770 billion (-5.1%) from its peak in the March quarter, driven by a $490 billion (-5.0%) decrease in the value of housing assets.
In per capita terms, household net wealth fell by $11,700 (-2.1%) over the quarter, driven by a $13,900 (-3.8%) decline in the value of housing assets.
Since the March peak, per capita household wealth has fallen by $32,700 (-5.7%), with per capita housing values down $20,800 (-5.5%):
The situation will obviously have deteriorated since 30 September on the back of the RBA’s aggressive interest rate hikes.
Since then, 5-city aggregate dwelling values have fallen a further 2.8%, which will have wiped another $360 billion from household wealth based on the ABS’ figures:
If AMP Capital’s and Morgan Stanley’s prediction of a possible 20% peak-to-trough decline in national dwelling values comes to fruition, then nearly $2 trillion will be shaved from Australia’s household wealth.
Ultimately, how much wealth Australian households lose depends on whether the RBA continues hiking interest rates in 2023.
