Brace for a $1 trillion hit to household wealth

Australia ranks near the top in the world for household wealth.

According to the UBS Global Wealth Report 2026, Australia had the third-highest median household wealth in the world, after Luxembourg and Belgium.

Source: UBS Global Wealth Report (2026)

However, real estate makes up the majority of Australia’s household wealth, unlike most countries:

Source: UBS Global Wealth Report (2026)

Australian housing values have increased relentlessly over the past 30 years, underpinning the rise in household wealth.

The average Australian dwelling value was just over $1.1 million in the June quarter of 2026, up from around $491,000 in the September quarter of 2011:

In per capita terms, Australia’s housing stock was worth $434,000 in the June quarter of 2026:

This surge in dwelling values has underpinned the rise in Australian household wealth.

Last week, the Australian Bureau of Statistics (ABS) released household wealth data showing that net household wealth per capita was $691,600 in the June quarter of 2026, with dwelling assets (57%) accounting for the majority of total household assets:

The Australian housing market is currently undergoing what is likely to be its largest price correction in at least 40 years, with values across the five largest capital city markets already down 6.0% from their peak:

With the Reserve Bank expected to lift the official cash rate by another two or three times, house prices are likely to fall sharply from here.

HSBC has the most realistic house price forecast, tipping a 13% decline from peak across the combined capital cities:

Given that Australia’s housing stock peaked at $12.2 trillion in the March quarter of 2026, such a decline in prices would imply that the fall in dwelling asset values would exceed $1 trillion, despite the number of dwellings increasing.

It will be interesting to see whether Australia slides down the global household wealth rankings next year owing to the house price correction.