Next time you read about Australia’s so-called debt crisis, consider this: ABS data shows that household net worth across Australia is $9.4 trillion. This comprises $11.7 trillion in assets, minus $2.3 trillion in liabilities.
That amounts to a huge level of equity in the average household. Over the 12 months to December 2016, net worth increased 8.3% with asset values increasing 7.9% and liabilities increasing 6.4%. The data breaks out the value of residential land and dwellings, which at the end of 2016 was valued at $6.114 trillion, having increased 8.3% over the year. Residential property accounts for 52% of total household assets. So while it may be true that household debt is the highest it’s been, it’s also true that the level of assets owned by the average household is also the highest ever. The gap between the two is substantial – and that is the most important statistic of all. According to the ABS data, our debt levels are just 20% of our asset levels.
Terry Ryder – Australia’s Leading Independent Property Researcher
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