Property price increases drive strong growth in household wealth
The highest quarterly increase in the value of land and dwellings since 2009 has fuelled growth in Australian household net worth of more than ten per cent annualised.According to the latest Australian Bureau of Statistics figures, household net worth grew from A$8.2 trillion in the March quarter to $8.4 trillion in the June quarter - an increase of 2.7 per cent (and an annualised rate of 10.8 per cent).Household wealth was made up of $5.7 trillion of land and dwelling assets and $4.2 trillion of financial assets, less $2.2 trillion of liabilities.Growth in the value of land and dwellings ($258.9 billion) was the chief contributor to the increase during the quarter. It was the highest quarterly growth in the value of land and dwellings since December 2009.Growth in the value of land and dwellings, at five per cent, was more than twice the rate of growth in liabilities, at 2.2 per cent.The ratio of interest payable on debt to income maintained its downward trend, falling from 11.1 per cent in the March quarter to 10.7 per cent in the June quarter.The ratio of mortgage debt to land and dwelling value fell from 29.1 per cent in the March quarter to 28.4 per cent in June.The ratio of total household debt to total assets was 20.5 per cent.Household net saving fell from $16.2 billion in the March quarter to $14.6 billion in June.