Sydney, Dec 21: In a surprising turn of events amid the ongoing cost of living crisis, Australian household wealth has experienced a notable increase for the fourth consecutive quarter.
According to the latest figures released by the Australian Bureau of Statistics (ABS), there was a 2.3% rise, amounting to $339 billion, in the September quarter of 2023.
The total household wealth reached an impressive $15.3 trillion during this period, marking a 7 % increase, or $998 billion, compared to the same period last year.
This growth has been primarily attributed to the value of residential land and dwellings, contributing 1.7 percentage points to the quarterly growth.
Mish Tan, the Head of Finance Statistics at ABS, commented on the trend, stating, “Household wealth is supported by house prices which have continued to grow despite increases in interest rates.”
This statement highlights the resilience of the Australian housing market in the face of economic challenges.
The increase in household wealth was further bolstered by seasonal tax refunds at the start of the financial year.
Deposits grew by 3.4%, an increment of $52.8 billion, over the September quarter. Of this, $24.4 billion was allocated to accessible transaction accounts, also known as Transferrable Deposits, with a significant portion going into offset accounts.
Additionally, $26.1 billion was channelled into high-interest Non-Transferable Deposits, including term deposits.
The financial markets also felt the impact of the initial allowance of the Term Funding Facility (TFF) maturing on September 30, 2023. Banks’ exchange settlement accounts with the Reserve Bank of Australia dropped by $53.7 billion due to the $79.8 billion of securitized bonds used for securing funding returning to bank balance sheets. To meet liquidity requirements, banks acquired $20.7 billion of Semi-Government Bonds.
Dr Tan elaborated on the significance of the TFF, “The TFF was a key source of funding for banks through the COVID-19 pandemic.
With the first tranche now maturing, banks are returning to traditional sources of funding, issuing $14.0 billion worth of bonds domestically and $9.3 billion of one name paper offshore.”
The total demand for credit was reported at $90.2 billion, driven by private non-financial businesses ($46.5 billion), general government ($18.5 billion), and households ($13.9 billion).
This data reflects the ongoing dynamism in the Australian financial sector and the broader economy, despite the challenges posed by the global economic climate.
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