Household wealth fell 3.3 per cent ($484 billion) in the June quarter 2022 to $14.4 trillion, and wealth per capita fell to $553,954, according to figures released today (September 29) by the Australian Bureau of Statistics (ABS).
“This is the first quarterly fall in household wealth since the beginning of the pandemic, and coincides with increased cost of living pressures and rising interest rates,” ABS head of finance and wealth Katherine Keenan said.
“Falling superannuation balances contributed 1.7 percentage points to the 3.3 percent decline in household wealth. This reflected the large price falls in domestic and overseas share markets,” Ms Keenan said.
Softening the downturn was $38.0 billion in contributions to superannuation which reflect ongoing strength in the labour market and the usual strong personal contributions seen at the end of the financial year.
Residential property prices fell for the first time in two years, which contributed 1.1 percentage points to the overall decline in household wealth.
Despite the fall in household wealth, household deposits grew by 0.5 per cent ($7.4 billion) during the quarter.
Households, such as those Melton and Moorabool, have accumulated $311.9 billion in currency and deposits since the start of the pandemic.
Total demand for credit fell from its record high last quarter (which was dominated by a large corporate restructure) but remained elevated at $134.9 billion.
The strength was driven by households ($53.1 billion), government ($44.9 billion) and other private non-financial corporations ($25.4 billion).
“Household demand for credit was the second highest on record, reflecting ongoing activity in the property market for both owner occupier and investor loans,” Ms Keenan said.
National government demand for credit ($26.0 billion) was driven by bond issuances to fund defence equipment and capital transfers to state governments for natural disaster relief payments. State and local government demand for credit ($18.8 billion) was driven by loans for investment in road and rail infrastructure, and buildings for health and education.
Other private non-financial corporations’ demand for credit was driven by $18.0 billion of loans. Favourable growing conditions in the agricultural sector led to strength in machinery and equipment investment and car rental businesses re-stocked their fleets as interstate travel increased demand for car hire.
