Australian households increased their savings in the June quarter, although the rate of growth in deposits weakened in the face of increased cost of living pressures.
According to Australian Bureau of Statistics household wealth data released yesterday, household deposits grew by 0.5 per cent (A$7.4 billion) in the June quarter. Deposits rose $34.2 billion in the March quarter.
High levels of savings have been a notable response to COVID and the ABS said households have accumulated $311.9 billion in currency and deposits since the start of the pandemic.
Households also added $38 billion to their superannuation funds during the quarter, a combination of compulsory employer contributions in an expanding employment market and strong personal contributions at the end of the financial year.
Household demand for credit remains high. Lending transactions worth $53.2 billion in the quarter were the second highest on record, driven by demand for housing finance. Demand of $54 billion in the December quarter last year was the highest.
Corrections in the local and international equity markets, combined with the beginning of the housing market correction, were the main contributors to a 3.3 per cent fall in household net wealth – down $484 billion to $14.4 trillion.
It was the first quarterly fall in household wealth since the start of the pandemic.