In the December quarter, Australian household wealth increased by 0.9%, or $143.6 billion, marking the smallest quarterly growth since the September quarter of 2022.
The Australian Bureau of Statistics (ABS) reported that total household wealth reached $17.0 trillion, a 6.6% rise year-over-year, amounting to an additional $1tn compared to the previous year.
The value of residential land and dwellings experienced a slight increase of $24.6 billion or 0.2%, contributing modestly to the overall wealth growth. This period also saw a mixed movement in the housing sector, with a 0.5% increase in the number of dwellings contrasting a 0.2% decline in house prices.
“While household wealth continues to rise, two consecutive quarters of falls in house prices have slowed growth,” said Mish Tan (pictured), ABS head of finance statistics. “Annual growth in the value of residential land and dwellings over the 12 months to December 2024 was 4.4% compared to 8.1% in 2023.”
Household deposits rose by 3.2% or $55.7bn during the quarter, driven by income growth and government policies aimed at easing cost-of-living pressures, such as stage 3 tax cuts and energy bill rebates.
Superannuation assets also saw a notable increase, up 1.4% or $55.2bn, bolstered by strong returns on international investments and continued contributions.
Total demand for credit amounted to $92.1bn, primarily fueled by private non-financial businesses and household sectors.
Interestingly, the December quarter recorded the lowest demand for credit by the Commonwealth government since the inception of the data series in 1988, largely due to the maturation of early pandemic-era debt issuances.
The report on household wealth comes against a backdrop of deepening economic disparities.
According to Monash University’s third Transforming Australia report, alarming trends in wealth distribution have been highlighted, with the share of wealth held by Australia’s bottom 40% sharply declining from 7.8% in 2004 to about 5.5% in 2020.
This decline is occurring alongside an increase in poverty, with 3.3 million Australians now living below the poverty line.
The report issued a stern warning: Without shifting towards long-term policymaking beyond the three-year electoral cycle, Australia risks lagging behind other developed nations.
The analysis showed that inequalities across wealth, housing, health, and education are worsening, suggesting that the modest gains in household wealth may not be benefiting all segments of society equally.
