A resurgent share market helped household wealth edge higher in the March quarter, but plummeting house prices meant mortgage debt continued to grow faster than the value of real estate assets.
Household wealth in Australia lifted 0.2 per cent to $10.24 trillion during the first three months of 2019, having dipped by 2.1 per cent the previous quarter, with superannuation reserves the primary beneficiary of a $147.8 billion rebound in company shares.
The benchmark S&P/ASX200 index rose 9.46 per cent in the three months to March, having dipped by 9.04 per cent in the December quarter.
But Thursday’s data from the Australian Bureau of Statistics revealed a fifth consecutive quarter of residential real estate losses, which was the main factor behind a decline in household wealth per person by $1,500 to $404,566.
The per capita fall follows a $10,198 drop in the December quarter and a $2,264 fall in the three months to September 2018.
The decline in property prices also pushed the ratio of Australians’ mortgage debt to real estate assets from 28.1 per cent to 29.0 per cent, matching the all-time peak reached in July 2013.
Household net saving increased from $6.8 billion to $9.5 billion, driven by less spending, but people also had less disposable income due to a decline in employee compensation.
In the time since the data was collected, the banks have lowered their variable mortgage rates following an RBA rate cut, while APRA has suggested easing lending criteria.
The Aussie dollar initially lifted to a new three-week high of 69.99 US cents following the release of Thursday’s data before easing to 69.94 by 1500 AEST.
The ABS figures also show that Australia’s national investment declined $22.2 billion during the quarter to $100.9 billion, following a record high of $123.1 billion during the December quarter.
Australia continued to borrow from overseas to fund investment, borrowing $1 billion from non-residents during the March quarter as national investment exceeded national saving.
In seasonally adjusted terms, Australia has been a net borrower from overseas since the September quarter 1975.