New statistics reveal 'wealth effect' felt across Aussie households
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Homeownership has always been a dream for many Aussies.
There's nothing more fulfilling than coming home to your own space after a long day outside or a place to host visiting family members and grandkids.
Thanks to recent data, this dream is not only providing a roof over their heads but also a significant boost in income.
According to the latest figures from the Australian Bureau of Statistics (ABS), millions of Aussie households saw their wealth increase by an average of $25,000 last year—all without any additional effort.
This 'noteworthy' trend was a result of a sustained rise in household wealth for a sixth consecutive quarter, climbing by 2.7 per cent.
The data pointed out that around nine million Australians who either own their home or are currently paying a mortgage enjoyed this average increase in their overall wealth up to the March quarter.
ANZ Economist Madeline Dunk anticipated that this figure would continue to grow as property prices show no signs of abating.
'It's something the RBA has noted before that potentially that wealth effect is supporting household consumption,' Ms Dunk stated.
Indeed, the 'wealth effect' is a psychological phenomenon where people spend more as the value of their assets rises, even if their income remains the same.
This effect is prevalent among homeowners, who, according to Ms Dunk, exhibit higher consumer confidence than renters.
'People who are over 55 are generally tending to spend more and spend more on the fun stuff – they're going on cruises, they're still buying those indulgences that a lot of other people have cut back on,' she shared.
However, this surge in wealth has its disparities.
As property prices soar, entering the housing market became increasingly daunting for first-home buyers.
Digital Finance Analytics' latest data indicated that first-home buyers relying on financial assistance from their parents skyrocketed to 59 per cent—a significant leap from just three per cent in 2010.
Finder.com.au Home Loan Expert Graham Cooke highlighted the privilege that comes with having property-owning parents.
'The biggest challenge for most home buyers is getting a deposit together while prices continue to rise, and it's not surprising this is what most parents provide help with. Those who can't get this help can struggle,' he said.
Overall, this 'wealth effect' could represent an opportunity to fund a more comfortable retirement or support family members trying to get their own home.
It's essential to consider the broader implications of this data and the ways we can support equitable homeownership opportunities.
Have you experienced the 'wealth effect' in your own life? Share your thoughts and insights with us in the comments below.
There's nothing more fulfilling than coming home to your own space after a long day outside or a place to host visiting family members and grandkids.
Thanks to recent data, this dream is not only providing a roof over their heads but also a significant boost in income.
According to the latest figures from the Australian Bureau of Statistics (ABS), millions of Aussie households saw their wealth increase by an average of $25,000 last year—all without any additional effort.
This 'noteworthy' trend was a result of a sustained rise in household wealth for a sixth consecutive quarter, climbing by 2.7 per cent.
The data pointed out that around nine million Australians who either own their home or are currently paying a mortgage enjoyed this average increase in their overall wealth up to the March quarter.
According to data, Aussies who secured their homes amid the housing market crisis have more consumer confidence. Image Credit: Pexels/Alena Darmel
ANZ Economist Madeline Dunk anticipated that this figure would continue to grow as property prices show no signs of abating.
'It's something the RBA has noted before that potentially that wealth effect is supporting household consumption,' Ms Dunk stated.
Indeed, the 'wealth effect' is a psychological phenomenon where people spend more as the value of their assets rises, even if their income remains the same.
This effect is prevalent among homeowners, who, according to Ms Dunk, exhibit higher consumer confidence than renters.
'People who are over 55 are generally tending to spend more and spend more on the fun stuff – they're going on cruises, they're still buying those indulgences that a lot of other people have cut back on,' she shared.
However, this surge in wealth has its disparities.
As property prices soar, entering the housing market became increasingly daunting for first-home buyers.
Digital Finance Analytics' latest data indicated that first-home buyers relying on financial assistance from their parents skyrocketed to 59 per cent—a significant leap from just three per cent in 2010.
Finder.com.au Home Loan Expert Graham Cooke highlighted the privilege that comes with having property-owning parents.
'The biggest challenge for most home buyers is getting a deposit together while prices continue to rise, and it's not surprising this is what most parents provide help with. Those who can't get this help can struggle,' he said.
Overall, this 'wealth effect' could represent an opportunity to fund a more comfortable retirement or support family members trying to get their own home.
It's essential to consider the broader implications of this data and the ways we can support equitable homeownership opportunities.
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