Rich Australia

What does it all mean?

• Most people like to think they are doing it tough. In large part that is because the list of so-called ‘essentials’ is bigger nowadays and in large part includes more ‘discretionary’ items than in the past. But the latest data shows that more families can be regarded as relatively well off. In 2011/12, the proportion of families with net wealth – that is assets exceeding liabilities – of more than $1 million was over 20 per cent. That’s one in five families and the data does take into account inflation over time.
• While net wealth fell over the two years to June 2012 by almost $31,000 or 4 per cent, over the past year home prices lifted by around 4 per cent with total returns on shares up by over 20 per cent. So it more than likely that wealth is back at record highs, shrugging off the Global Financial Crisis and subsequent European Debt Crisis.
• Consumers have been cautious to spend over the past year, but, underpinned by generational low interest rates, it is clear that spending is set to rebound after the election.
• Australians are getting richer. After adjusting for inflation over time, the proportion of people with wealth between zero and $50,000 fell from 14.6 per cent to 12.7 per cent over the eight years to 2011/12 while families with more than $1 million rose from 14.6 per cent to 20.7 per cent.
• Mean (average) net worth (assets less liabilities) stood at $728,139 in 2011/12, down $30,891 or 4.1 per cent over the two years from 2008/09.
• Average household assets stood at $858,200 in 2011/12 with the family home accounting for $369,900 (43 per cent) of the total. The next highest asset was superannuation at $132,300 followed by investment property at $129,100 and home contents (TVs, fridges etc) at $62,600.
• Average household debt in 2011/12 was $130,100 and dominated by outstanding loans (principal) on the family home at $74,700 and other property debt at $42,100.
• Wealth in the bottom 20 per cent of families averaged $31,200 in 2011/12 while wealth in the top 20 per cent averaged $2.2 million.
• In 2011/12, average (mean) wealth was highest in the ACT at $929,800 followed by Western Australia at $768,400, NSW at $756,000, Victoria at $746,400, Northern Territory at $722,000, South Australia at $666,400; Queensland at $663,600 and Tasmania at $601,000.
• In Canberra, wealth was highest at $929,784 in 2011/12, but next highest is Melbourne at $813,417, followed by Sydney, Darwin, Perth, Brisbane, Adelaide and Hobart.
• The state with the highest proportion of households owning their homes outright was Tasmania (35.3 per cent) from South Australia at 33.9 per cent. The lowest proportion of owner occupiers is in the Northern Territory at 16.5 per cent.
• When official interest rates are cut, the state/territory receiving the biggest boost is the ACT (40.4 per cent of households have a mortgage) followed by Western Australia (40 per cent) and South Australia (38.4 per cent).
  • Consumers may not be actively spending at present but that doesn’t mean they are unable to spend. Household wealth is either at or near record highs and with home prices rising, wealth levels will follow suit.
  • There is a raft of data classified by region, income and wealth ranges together with varying household characteristics, giving investors a better understanding about how Aussie families are positioned. The data is useful in understanding ‘“hot button” issues influencing consumer spending.
  • There are key differences in wealth and housing tenure between capital cities and regional areas in states and territories, especially in Victoria
  • While there is plenty of attention paid to household debt, household assets continues to grow at a faster rate, lifting wealth levels to record highs.

What do the figures show?

• Mean (average) net worth (assets less liabilities) stood at $728,139 in 2011/12, down $30,891 or 4.1 per cent over the two years from 2008/09.
• Average household assets stood at $858,200 in 2011/12 with the family home accounting for $369,900 (43 per cent) of the total. The next highest asset was superannuation at $132,300 followed by investment property at $129,100 and home contents (TVs, fridges etc) at $62,600.
• Average household debt in 2011/12 was $130,100 and dominated by outstanding loans (principal) on the family home at $74,700 and other property debt at $42,100.
• Wealth in the bottom 20 per cent of families averaged $31,200 in 2011/12 while wealth in the top 20 per cent averaged $2.2 million.
• In 2011/12, average (mean) wealth was highest in the ACT at $929,800 followed by Western Australia at $768,400, NSW at $756,000, Victoria at $746,400, Northern Territory at $722,000, South Australia at $666,400; Queensland at $663,600 and Tasmania at $601,000.
• In Canberra, wealth was highest at $929,784 in 2011/12, but next highest is Melbourne at $813,417, followed by Sydney, Darwin, Perth, Brisbane, Adelaide and Hobart.
• The state with the highest proportion of households owning their homes outright was Tasmania (35.3 per cent) from South Australia at 33.9 per cent. The lowest proportion of owner occupiers is in the Northern Territory at 16.5 per cent.
• When official interest rates are cut, the state/territory receiving the biggest boost is the ACT (40.4 per cent of households have a mortgage) followed by Western Australia (40 per cent) and South Australia (38.4 per cent).

What are the implications for investors?

• Consumers may not be actively spending at present but that doesn’t mean they are unable to spend. Household wealth is either at or near record highs and with home prices rising, wealth levels will follow suit.
• There is a raft of data classified by region, income and wealth ranges together with varying household characteristics, giving investors a better understanding about how Aussie families are positioned. The data is useful in understanding ‘“hot button” issues influencing consumer spending.
• There are key differences in wealth and housing tenure between capital cities and regional areas in states and territories, especially in Victoria
• While there is plenty of attention paid to household debt, household assets continues to grow at a faster rate, lifting wealth levels to record highs.