Australians are now a whole lot richer than they than they have ever been before, according to a new Commsec report . The total wealth of the average Australian household is now a record $353,881:
But you can’t attribute this increase to a massive upswing in wages. Average weekly earnings are barely budging, when accounting for inflation.
Instead, the increased wealth is due to a confluence of other factors.
For starters, Australian households have been consistently and spectacularly deleveraging since the GFC. In the June quarter alone, the same quarter that saw household wealth gain $225.5 billion to hit the fresh highs, household debt went down by $25 billion:
If you want to find the other $200 billion, the place to look is assets – both housing and shares. Commsec notes that cash holdings have not dramatically increased along with the rise in wealth and remain roughly in line with trend:
The All Ordinaries Index was still within striking distance of 6000 in June during the period the report covers:
And the housing market had recorded another quarterly gain, at just under 3% to that period. Housing accounts for the vast majority of our increased wealth.
What happens to total Australian wealth once the latest stock market slump – it now hovers around 5000 on the All Ords – is accounted for will be interesting to see.