Australia | Apr 16 2008
By Greg Peel
US recession? Who cares? High interest rates? Not my problem. Soaring petrol prices? James always fills up the Hummer for me. Pop another Dom for me will you? There’s a good chap.
According to statistics just released by the Australian Bureau of Statistics and the Federal Treasury, Australians are currently as wealthy as they ever have been, with the latest survey revealing a new record high. The average Aussie now has the equivalent of $254,000 tied up in assets of one form or another, up by $22,000 in 2007. Continually rising housing prices have been credited for most of the gain, given the share market hasn’t cooperated much of late.
CommSec notes that not only have wealth levels increased, but average debt levels have fallen. Per capita debt has fallen from $27,500 to $27,400 in the December quarter. That should keep Mick Gatto off our backs for now. Private sector debt fell by 1.1%.
In real terms, CommSec suggests private sector wealth rose by 2.9% in the December quarter, and 8.2% for the year. It has risen 58.8% in five years, and 116.9% in ten. That’s the biggest decade gain in the four and a half decade history of the survey.
I might just order that second bottle of wine after all.
The good news, as CommSec points out, is that the increase in wealth over the year has been double the increase in debt. This puts Australians as a whole in a great position to weather any economic headwinds, stock market falls, or property slumps. The consumer, in theory, will not waver.
But the common theme remains that the property market will only drift slightly before rising again later in 2008. Higher interest rates have taken a temporary toll, but rates will now be held steady and further data today show that rental vacancy rates remain entrenched at near 40-year lows. Vacancy was steady at 1.43% in the December quarter.
Higher rental yields will encourage investors back into the investment property market, which will in turn push prices of existing dwellings higher.
God must truly be an Australian.
Excuse me while I saddle up my pushbike. I hear the Salvos are handing out free bread today.