Record household wealth takes a breather: Pete Wargent

Record household wealth takes a breather: Pete Wargent
Record household wealth takes a breather: Pete Wargent
Dwelling prices steadied in the first quarter of 2016. 
 
Record household wealth takes a breather: Pete Wargent
 
With share markets also down a notch in the first quarter, total household net worth ticked down marginally to $8,64 trillion. It was the first such quarterly decline since September 2011.
 
Record household wealth takes a breather: Pete Wargent
 
Australians have about $4 trillion in net worth or equity tied up in housing. Sounds like a lot, but then in the UK - where there is no compulsory superannuation - the share of housing wealth has been tracking at close to two thirds of total household net worth according to the Office for National Statistics. 
 
Australia's average net worth per capital therefore ticked to just a notch below $360,000, which is still exceptionally strong. 

 Click to enlarge

Record household wealth takes a breather: Pete Wargent


Gearing measures

On the matter of housing affordability, the interest payable to income ratio increased for a second successive quarter, although it remains 37 per cent below its 2008 peak. 

Click to enlarge 

Record household wealth takes a breather: Pete Wargent
 
Gearing ratios ticked a bit higher, both for mortgage debt to housing assets (28.6 per cent) and for debt to assets (20.5 per cent).

Click to enlarge

Record household wealth takes a breather: Pete Wargent

Overall, Q1 was a soft quarter for household net worth.
 
However, CoreLogic reported today that both Sydney houses (+6.8 percent) and apartments (+6.7 percent) surged in value in the June quarter, so household net worth will no doubt increase again in Q2.
 
Houses and units across the eight capital cities grew by +3.8 percent and +3.7 percent in the June quarter respectively. 
 

PETE WARGENT is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and blogger.

His latest book is Four Green Houses and a Red Hotel.

Pete Wargent

Pete Wargent

Pete Wargent is the co-founder of BuyersBuyers.com.au, offering affordable homebuying assistance to all Australians, and a best-selling author and blogger.

Tags: 
Residential Market Property Assets

Community Discussion

Be the first one to comment on this article
What would you like to say about this project?