Australia’s household wealth grew by $137.1 billion in the March quarter, boosted by housing gains – but super balances fell for the first time since 2022.
However, these wealth gains have not been evenly distributed.
New analysis from The Australia Institute shows that wealth inequality has deepened over the past two decades, largely fuelled by the concentration of investment properties in the hands of the richest 10% of households.
Australian household wealth increased 0.8% in the March quarter, according to the latest Australian Bureau of Statistics (ABS) data.
“The growth in household wealth was driven by the continued rise in the value of residential land and dwellings during the quarter,” Mish Tan (pictured), ABS head of finance statistics, said in a media release. “This was up 1.2%, or $125.3 billion, adding around 0.7 percentage points to the growth in household wealth.”
House prices rose 0.7% in the March quarter –marking eight consecutive quarters of growth – though annual growth slowed to 4.2%, down from 8% in March 2024.
Household borrowing increased by 1.4% (+$42.4 billion), which shaved 0.2 percentage points off total wealth growth.
“The RBA’s cash rate cut in February this year was the first easing of interest rates since November 2020, giving some relief to household budgets in the March quarter through lower mortgage interest payments,” Tan said.
“We expect to see the broader impact of recent cuts, including another in May, on house prices and credit growth later this year.”
Superannuation balances fell 0.4% (-$16.4 billion), subtracting 0.1 percentage point from wealth growth.
“Household superannuation balances fell for the first time since the September quarter 2022 as global uncertainty weighed on share prices,” Tan said.
Household deposits rose 1.7% (+$29.5 billion), contributing 0.3 percentage points to household wealth.
Meanwhile, total demand for credit hit $136.1 billion, the highest since June 2022. The largest borrowers were:
“The March quarter saw the highest demand for credit by the Commonwealth government since the September quarter 2020,” Tan said. “This was driven by the government issuing bonds ahead of future expenditure, after paying off $24.4 billion of debt in the December quarter.”
