Rising property values have pumped up household wealth, ABS report finds

BOOMING property values have pushed average wealth for Australian households towards the million dollar mark. How do you compare?

Rising property values are the main contributor to household wealth. Picture: iStock

BOOMING property values have pushed average wealth for Australian households towards the million dollar mark.

The nation’s households are worth an average $929,400 each, according to latest research.

Property and superannuation make up the bulk of asset riches, Australian Bureau of Statistics data shows.

Cars are valued at $24,500, home contents $70,000, and shares $25,000, it also reveals.

The ABS calculates household wealth as the value of assets such as property, investments and savings, less debts such as loans and credit cards.

Outright homeowners sit prettiest, while single parents and renters are among the worse off.

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Rising property values were the main contributor to household wealth. Picture: iStock

The analysis, based on the biggest survey of its type in Australia, estimates:

AVERAGE household wealth rose by $94,100 in real terms in the two years to 2015-16, due to higher property values;

MELBOURNE households’ net worth averaged $950,300, compared with $639,200 for the rest of Victoria;

WEALTH climbs from $115,600 for the nation’s youngest households to $317,900 for those headed by 25-34 year olds; and

IT hits $645,700 once the major breadwinner or homeowner is aged 35-44; $1,162,000 at age 45-54; and peaks at $1.3 million at 55-74.

“For most Australians, both income and wealth tends to increase over the life course, and then decrease after retirement, as households have less income after they stop working and start to draw on stores of wealth such as superannuation,” the ABS noted.

The report found households that own their home outright were worth a cool $1.6 million on average — $619,000 more than those shackled to a mortgage.

For renters, net worth averaged just $199,000.

The gap between the richest and poorest rungs of the wealth ladder is massive.

“The wealthiest 20 per cent of households held more than 60 per cent of all household wealth, averaging $2.9 million per household,” ABS chief economist Bruce Hockman said.

“By comparison, those in the middle 20 per cent held 11 per cent of all household wealth, averaging $528,400 per household in 2015-16. The lowest 20 per cent controlled less than 1 per cent of all household wealth, with average wealth at $36,500.”

Mr Hockman said the share of wealth had remained stable over two years.

The ABS Income and Wealth survey covers 18,000 households.

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@KarenCollierHS