Household wealth rose for the fourth straight quarter, up 2.3 per cent or $339 billion in the September quarter of 2023, according to figures released by the Australian Bureau of Statistics (ABS).
The total household wealth surged to $15.3 trillion during this period, marking a significant 7.0 per cent increase ($998 billion) compared to the figures from a year ago.
This was largely driven by residential land and dwellings, which contributed 1.7 percentage points to quarterly growth.
Mish Tan, the ABS head of finance statistics, emphasised: “Household wealth is supported by house prices, which have continued to grow despite increases in interest rates.”
It came after CoreLogic’s national Home Value Index (HVI) that reported a 0.8 per cent surge in September, marking the eighth consecutive month of growth in the ongoing recovery trend.
However, this quarterly growth has shown a moderation compared to the 3.0 per cent increase reported in the June quarter. This deceleration hints at a slowdown in the wake of rising advertised stock levels.
Nevertheless, Tim Lawless, CoreLogic’s research director, highlighted a positive trend, noting that since the trough in January, the national index has rebounded by 6.6 per cent, showcasing a significant recovery.
The ABS data noted households in Australia reported a remarkable net lending position of $57.2 billion.
This surge can be attributed primarily to a substantial acquisition of financial assets amounting to $75.5 billion, offset by liabilities totalling $18.4 billion.
The surge in deposit assets this quarter can be largely attributed to households receiving proceeds from tax returns.
The ABS data indicates that individuals, aiming to capitalise on higher interest rates, have shown a preference for deposit accounts to securely allocate their excess funds.
Demand for credit soars
The demand for credit in Australia soared to a substantial $90.2 billion, with households borrowing $13.9 billion.
However, housing credit growth experienced a slowdown in the September quarter due to a moderation in housing market activity.
This slowdown occurred within an environment of elevated house prices and constrained borrowing capacity amid a high interest rate landscape.
Furthermore, households borrowed $14.6 billion in long-term loans while repaying $618 million in short-term loans during this period.
[Related: Economists expect home values to reach new record in 2023]
