January 11 2021
"2020 proved to be an eye-opener for countless Australians when it comes to their finances. People tightened their pockets, took budgeting more seriously and paid closer attention to their money." - Ben Crow, Chief Operating Officer
Household wealth in Australia has hit a record high despite the coronavirus pandemic, partly due to people squirrelling away savings in their banks.
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Australian Bureau of Statistics data released on Thursday show total household wealth rose by 1.7 per cent to a record high of $11,351b in the September quarter, eclipsing the previous high of $11,248b recorded in the December quarter last year.
The increase was mainly attributed to a 5.4 per cent surge in deposits, a 1.2 per cent lift in property values and a similar increase in superannuation balances.
Average household wealth grew by 1.6 per cent or $6850 to $441,649 per person.
The ABS explained a 0.1 per cent population increase was the reason total wealth grew slightly more than average wealth.
“The September quarter 2020 financial accounts reflected improvements in the Australian and global financial markets, as well as a partial recovery of the domestic economy in response to government and (Reserve Bank) policies, and easing social restrictions across most of Australia,” ABS head of finance and wealth Amanda Seneviratne said.
The ABS said the improved property prices recouped losses suffered in the June quarter, reflecting the easing of restrictions on auctions and open house inspections.
That led to an $8.2b increase in loan liabilities as new mortgages were taken out for property purchases.
The lift in bank savings was boosted by government income support packages such as JobKeeper, economic support payments and early access to superannuation.
“This was in addition to the normal increase in deposits in September quarters due to tax refunds,” the bureau said.
Also on Thursday, comparison website Finder released the results of a survey of more than 1000 Australians showing 70 per cent did not have an emergency fund - an account separate to regular savings, with the money set aside for urgent or unexpected costs.
Start the year strong with a clear plan for your money!
Source: News.com.au
May, R. (2020, December 17). Australian household wealth hits record high. NewsComAu. https://www.news.com.au/finance/money/wealth/australian-household-wealth-surges-despite-impact-of-pandemic/news-story/424af4ff9fde99c5e62c5faefc746bcd