Household wealth rises but affordability pressures persist

Total household wealth was up 2.7%, or $470.1 billion, in the June quarter 2025, according to fresh figures released by the Australian Bureau of Statistics (ABS).

“The growth in household wealth this quarter was driven by strong asset price growth, particularly in residential dwellings and superannuation balances,” Mish Tan (pictured), ABS head of finance statistics, said in a media release.

The value of residential land and dwellings increased 1.9%, or $205.2 billion. This was the largest contributor, adding around 1.2 percentage points to the growth in household wealth.

House prices were up 1.4% in the June quarter, following flat growth in the March quarter. Annual growth in house prices has slowed to 3.5%, down from 7.4% in the year to June 2024.

Household borrowing grew 1.9%, or $57.5 billion, reducing the overall growth in household wealth by 0.3 percentage points.

“There have been three interest rate cuts this year, in February, May and August. Despite this, the full impact of these cuts on house prices and credit growth may not be seen in our data until later this year,” Tan said.

Superannuation assets rose 4.9%, or $201.6 billion, contributing 1.2 percentage points to the overall growth in household wealth.

“Both global and domestic share markets recovered sharply from April lows,” Tan said. “This recovery followed the announcement of new trade tariff policies in the United States, closing the June quarter higher than at the end of March.” 

Affordability also showed some signs of improvement, with the Real Estate Institute of Australia reporting that loan repayments eased to 47.7% of income in the June quarter. REIA president Leanne Pilkington said the shift was “encouraging,” particularly for first-home buyers re-entering the market, though she cautioned the sector was “not yet out of the woods.”

Demand for credit down

Total demand for credit was $86.5b this quarter, a fall of $37.7 billion from the previous quarter.

This was driven by households ($55.2 billion) and private non-financial businesses ($35.4 billion), partially offset by national general government (-$23.5 billion).

“While Commonwealth government debt issuance was steady this quarter, a large repayment of existing debt brought the sector’s demand for credit to its lowest level since the series began,” Tan said.

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