Surging residential property prices have driven a rise in household wealth, which had its biggest quarterly growth rate in 11 years.
Total household wealth jumped 4.3 per cent in the final three months of last year – the highest quarterly growth rate in 11 years, Australian Bureau of Statistics data shows.
Residential assets contributed 2.2 percentage points, followed by superannuation balances and directly held shares at 1.4 and 0.5 percentage points respectively.
“The December quarter growth in household wealth was driven by rising residential property prices, reflecting record low interest rates, support through government programs such as the First Home Buyer and the HomeBuilder schemes, and pent up demand from buyers,” ABS head of finance and wealth Katherine Keenan said.
Over the year, however, household wealth only rose 7 per cent, below the long-term average of 7.3 per cent.
Residential assets lifted 7.7 per cent through the year to $528.3bn, with property prices contributing 6.1 percentage points to the growth.
“Owner-occupier housing loans grew 1.9 per cent, which was the strongest growth seen in four years, while investor housing loans grew 0.4 per cent, which was the first positive growth recorded in the past two years,” Ms Keenan said.
The housing debt-to-income ratio dipped slightly, thanks to income growth driven by COVID-19 support packages including JobKeeper – which ends next week – and the coronavirus supplement.
ABS says the ratio has fallen for the past four quarters, with a 2.5 per cent fall through the year – the biggest drop since 1990.