Real estate boosts Aussies’ wealth by $250 billion,
Australian households are becoming wealthier, despite ongoing challenges with the cost of living, according to recent data from the Australian Bureau of Statistics.
Over the June quarter, household wealth experienced a notable increase of 1.5 percent. Although this percentage may seem small, it translates to a substantial increase of $250 billion.
This development marks the seventh consecutive quarter during which household wealth in Australia has risen steadily. According to Dr. Mish Tan, head of finance statistics at ABS, rising house prices are the primary driver of this growth.
Dr. Tan noted, “House prices have continued to rise across most states and territories, despite the presence of high interest rates.”
Moreover, this trend reflects ongoing housing supply constraints along with a rise in investor activity during the quarter.
As a result, Australians who own property have witnessed significant increases in the value of their homes.
However, it is essential to note that while many homeowners are asset-rich, they often remain cash-poor.
During the June quarter, assets such as shares and superannuation experienced steady increases.
In contrast, cash savings, including currency and deposits, decreased significantly by $9.2 billion during the same period.
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Household savings rates in Australia are currently extremely low.
The average Australian household is saving just 0.6 percent of their income.
This figure represents a significant decline from the long-term average of 5 percent, which has been consistent since 2000.
Additionally, when it comes to spending habits, Australians are notably reducing discretionary expenses.
For instance, spending on cafes and hotels is decreasing considerably.
Conversely, households are increasing their essential spending on necessities like energy bills, healthcare, and rent.
This shift in priorities reflects the ongoing challenges many Australians face in managing their finances.
