This article describes how household wealth has changed and briefly examines how developments in house prices, equity prices and superannuation returns may have affected the composition and distribution of household net worth.
It updates previous work done by the Bank using data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey, and is largely based on data from the latest wealth module of the HILDA Survey, conducted in 2006. The article describes how household wealth changed over the period since the earlier HILDA Survey in 2002, and briefly examines how developments in house prices, equity prices and superannuation returns may have affected the composition and distribution of household net worth in 2007 and 2008.
The article draws four main conclusions. First, the increase in net worth between 2002 and 2006 was broad-based across households, although it was generally more rapid for those residing in the resource-rich states and for older households. Second, growth in real-estate assets was the primary driver of growth in net worth between 2002 and 2006, and this factor drove most of the variation in trends in household net worth across the states. Third, growth in financial assets over the period was mainly due to superannuation assets and was broad-based across households of different ages and wealth levels. Fourth, the declines in net worth over 2008 are likely to have been mostly incurred by households at the top end of the wealth distribution, as the assets with the most significant price declines are predominantly held by those households.