Forget the downturn – we are richer than we think
Thursday, 17 July 2008
James Thomson
Rising interest rates, soaring fuel costs, falling profits – it’s enough to make us all feel a little worse off.
Well, cheer up – the wealth of the average Australian has risen to record levels over the last 12 months.
Economists and CommSec have taken a close look at data from Federal Treasury and the Australian Bureau of Statistics and estimate that the average wealth held by Australians in property, shares and other assets has climbed 8% or $21,700 over the last 12 months to $250,000.
“Despite sharemarket volatility, soaring costs, and decade-high interest rates, wealth levels have continued to rise, in part thanks to rising house prices, which has helped insulate Australians from the higher interest rates,” CommSec economist Savanth Sebastian says. “Just how well Australians have done is highlighted by the fact that wealth has more than doubled over the past decade.”
In news that will please the Reserve Bank, while wealth has continued to advance, debt levels remain subdued in the latest quarter. Per capita debt rose modestly in the last quarter, from $26,828 to $27,530.
Sebastian says data indicates that the balance sheets of Australian consumers are in great shape, ensuring that spending levels will hold up over 2008.
He’s even got some good news for beleaguered retailers. “Not only are balance sheets strong but the job market remains tight, ensuring that people keep coming back to shopping malls.”
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