Maybe you should be as not only did household wealth hit record highs at the end of 2021, the lift in wealth in the quarter was the biggest recorded in 11 years.
According to the Australian Bureau of Statistics (ABS), household wealth skyrocketed by $501 billion in the last three months of last year, to be up 7.0 per cent on a year ago.
It was the strongest quarterly gain in wealth in 11 years.
The average wealth per person rose by $19,028 in the December quarter ro hit $467,709, and total household wealth hit $12 trillion — both records.
No wonder that people are feeling more confident and spending.
Despite the pain of the lockdowns, and nearly a million jobs disappearing, by the end of 2020 Australia’s household wealth was surging.
Clearly the recession was great for some Australians.
What’s going on?
Well.. a lot has to do with owning real estate.
When the ABS compiles its data on wealth and income, “wealth” refers to the economic resources held by members of a household after all of their debts are theoretically paid off.
Wealth is made up of:
- Residential property (family home)
- Superannuation savings
- Shares and other financial assets (like bank deposits)
- Other non-financial assets (cars, furniture, artwork)
- Investments in other real estate (investment properties)
What’s happened here is that booming property prices have pushed Australia’s household wealth to record levels, despite hundreds of thousands of people remaining unemployed.
It followed an increase in property values of more than $200 billion in the September quarter.
We’re also stashing our cash
There is cash everywhere, not just from government stimulus packages.
Aussies stashed the cash, being concerned that we could have a prolonged recession, but now that this hasn’t occurred many consumers are back to spending.
Households held a record $1,322.6 billion in cash and deposits at the end of December. Cash and deposit holdings represented 21.6 per cent of financial assets.
The share of cash and deposits stands near the 21.5 per cent average since the global financial crisis and long-run average of 21.4 per cent.