Brisbane-based <a href="https://www.apartments.com.au/developers/red-co">Red &amp; Co Developments</a> has officially launched its $250million COMO apartment development in Varsity Lakes, while simultaneously commencing construction.&nbsp;

Building work is now underway at COMO following the appointment of <a href="https://www.apartments.com.au/builders/5point-projects">5Point Projects</a> as contractor to deliver the boutique development which will rise on a 2857 sqm site overlooking Lake Orr at 22 Lake Street.

When completed, <a href="https://www.apartments.com.au/new-apartments/como-varsity-lakes-22-lake-street-varsity-lakes-qld-4227">COMO</a> will comprise 156 apartments across 16 levels located in the heart of Varsity Lakes.

[smartcode_project:default project_id=135546 project_image_fid=363515]

The project, which will sit alongside Bond University, will deliver a diverse array of apartment designs comprising one-, two- and three-bedroom residences that have already attracted interest from local and interstate investors as well as an array of owner occupiers looking to gain a foothold in the precinct.

Red &amp; Co, which has largely focused on the Brisbane market in recent years where it has delivered more than 500 apartments and townhouses across 26 projects, has designed COMO to combine tranquil, lakeside living with the vibrant urban convenience of the vibrant Varsity Lakes village.

“We’re thrilled to announce a start to construction of COMO in conjunction with the official launch of the project, our first for the Gold Coast,” said Red &amp; Co Director and Co-Founder David Laverty.

[smartcode_project:default project_id=135546 project_image_fid=363509]

“COMO is superbly positioned to capture the essence of the Varsity Lakes village lifestyle and its thriving café and dining precinct, while delivering a much-needed diverse supply of premium residences for the local market.

“Pre-launch inquiries have been strong among both local and interstate investors and owner-occupiers, including downsizers and upgraders who appreciate the value proposition that COMO represents.”

Prices at COMO start from $1,000,050.

[smartcode_project:default project_id=135546 project_image_fid=363511]

Designed by <a href="https://www.apartments.com.au/architects/bda-architecture">BDA Architecture</a>, the COMO development incorporates an extensive range of amenities for residents including a 25-metre rooftop lap pool, sundeck, barbecue and dining areas, as well as multiple rooftop pickleball and paddleball courts, a wellness and activity centre, gym, sauna, plunge baths and landscaped gardens.

“COMO presents a rare opportunity to secure a stylish, lifestyle-focused home in one of the Gold Coast’s most sought-after neighbourhoods,” added Laverty.

“The rooftop will be the epicentre of fun for residents with an array of amenities for residents that are quite unique for a boutique project such as this, all while offering spectacular vistas across the Gold Coast as far north as Southport and south to Burleigh.”

[smartcode_project:default project_id=135546 project_image_fid=363514]

&nbsp;

Red &amp; Co has chosen the Varsity Lakes site for its proximity to top-tier schools, major shopping hubs, such as Robina Town Centre and its CBD offering, as well as key Gold Coast transport links, including Varsity Lakes Train Station.

COMO will be located just a short walk to shops, cafes and restaurants in Varsity Lakes and just a 10-minute drive to the Burleigh Heads beachfront.

With construction currently underway, Red &amp; Co anticipates COMO will be completed in 2028.

[smartcode_project_cta:default project_id=135546]

Joel Robinson

Red & Co to launch debut Gold Coast development Como Varsity Lakes as construction commences

Longstanding Gold Coast developer Raptis has acquired a prime development site on Surf Parade for its next Broadbeach apartment project.

Progressing towards completion of <a href="https://www.apartments.com.au/new-apartments/the-sterling-broadbeach-6-8-george-avenue-broadbeach-qld-4218">The Sterling Broadbeach</a>, 90 apartments on nearby George Avenue, <a href="https://www.apartments.com.au/developers/raptis">Raptis</a>, led by second-generation family man Evan Raptis, has picked up a block on the corner of Surf Parade and First Avenue.

The site had been earmarked for a luxury apartment project with 33 full-floor apartments across a 37-storey tower. Raptis will go back to the drawing board and create a building more appropriate for the site. The development application will be lodged later this month.

Evan Raptis told Apartments.com.au the site ticks all the boxes.

"Broadbeach is a suburb we've developed several buildings over the years. Surf Parade ticks all the boxes for the type of apartment development we want to deliver."

Raptis had several pre-lodgement meetings with council to ensure they are aligned in the development.

<img alt="Raptis" data-entity-type="file" data-entity-uuid="f0d58573-07a4-47a8-9f5e-fbf35fb03dc3" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-03-05%20at%204.58.23%E2%80%AFPM.png?VersionId=iczZEd_4_o4UL0PHMPJGfy_q3tv96J5i" />

Surf Parade has emerged in recent years as one of the most popular streets in Broadbeach for development.

South East Queensland developer Mosaic Property Group kicked it off with Marella by Mosaic. Bassar Group sold out Infinity on the street, while for its&nbsp;first Gold Coast development, Polycell grabbed a Surf Parade site for <a href="https://www.apartments.com.au/new-apartments/the-rochester-broadbeach-143-surf-parade-broadbeach-qld-4218">The Rochester</a>, which is nearly sold out.

Melbourne-based developer Hirsch &amp; Faigen recently launched its fourth Gold Coast project on the exclusive strip. The Eveleigh Broadbeach will have 100 apartments across a 31-storey building designed by Rothelowman.

GV Property Group site development specialists Antonio Mercuri and Luke Reaby, who both amalgamate sites and sell shovel-ready sites to developers up and down the Gold Coast, sold Surf Parade to Raptis.

Raptis secures prime Surf Parade site for next Broadbeach apartment development

Less than two years after breaking ground, Gardner Vaughan Group is celebrating the topping out of Bask, its second development in the exclusive coastal enclave of Bokarina on Queensland’s Sunshine Coast.&nbsp;

Located only minutes from the beachfront, the two seven-storey luxury apartment towers, known individually as Mydas and Caretta, offer a selection of one-to-four-bedroom residences with views of Lake Kawana, the Glasshouse Mountains, and Bokarina Beach.&nbsp;

[smartcode_project:default project_id=141609 project_image_fid=333359]

Gardner Vaughan Group Commercial Director Sam Gardner said the milestone marks the home stretch for construction, with first residents expected to be able to move in from Spring 2026.&nbsp;

“This is a significant milestone in bringing this development to life and represents our confidence in this region’s long-term growth and appeal,” Gardner said.&nbsp;

“With 85 per cent of apartments already sold, buyers are joining an established, coastal village that offers the very best of the Sunshine Coast – seasonally patrolled surf beaches, renowned restaurants, and links to established health and retail.&nbsp;

“The final collection of three- and four- bedroom apartments range in size from 127sqm to 300sqm, each with two or three secure car parks and storage, and with construction fast approaching completion we don’t expect the last few apartments to remain on the market for long.”&nbsp;

[smartcode_project:default project_id=141609 project_image_fid=333362]

Local restaurateur Luke Stringer, who co-owns and manages the award-winning Bocca Italian and Playa Mexican restaurants in Bokarina, has lived in the beachside suburb for 18 months and worked there for more than three years, and said the beachside suburb was thriving.&nbsp;

“It’s fair to say Bokarina is finally stepping into the sun and there’s a lot to love about the place,"&nbsp;Stringer said.

"It’s such a great community, where you see the same smiling faces every morning and everything’s within easy reach – it’s the perfect hub in the middle of the Sunshine Coast.

“When we first opened Bocca Italian, we were the lone restaurant, but it’s been amazing to see how the area has grown. The more venues that open, the busier it gets for everyone. When Playa Mexican opened its first Saturday night, Bocca had a record night and Playa was packed too, which blew us away how everyone is thriving.&nbsp;

“There’s a great energy around the place now, and people are really embracing Bokarina as a food and lifestyle destination.”&nbsp;

[smartcode_project:default project_id=141609 project_image_fid=363368]

Stringer joined other buyers at Bask Bokarina and the Gardner Vaughan Group team to celebrate the topping out at a special event in February.&nbsp;

Located in Kawana Waters, midway between Caloundra and Maroochydore, Bokarina locals enjoy scenic walking paths around Lake Kawana, playgrounds, beachfront boardwalk and parklands, alongside all the convenience of a masterplanned beachside community.&nbsp;

“You see people jogging or swimming in the morning, then grabbing coffee at the cafes, people are really embracing the area and all this growth is bringing more people to Bokarina,” Stringer added.&nbsp;

To take advantage of the vistas, each of the 135 apartments at Bask is designed with full size windows and high ceilings that provide an abundance of natural light.&nbsp;

Prices for the remaining three-bedroom apartments start at $1,599,000 and four-bedroom apartments start at $3,149,000.&nbsp;

[smartcode_project:default project_id=141609 project_image_fid=363369]

The mixed-use development also features ground-level retail space for cafés, dining options and boutiques, including the soon-to-be-opened ‘Corner Shop’, by the team behind Noosa’s well known ‘Organika’.

Sam Gardner said Gardner Vaughan Group’s 37-year history building and developing across South East Queensland has contributed to the success of its second development in Bokarina, which follows the recently completed Zinc Apartments.&nbsp;

“We care how people live and this is reflected in the way we approach the design and delivery of every development,” he said. “Furthermore, as a builder-developer we have full control over the construction program and our 100 per cent completion rate is something people can draw confidence from.”&nbsp;

Founded by civil engineers Guy Gardner and Darryl Vaughan in 1989, the family-owned business has evolved from a consultancy firm to an award-winning builder-developer, with projects across the Sunshine Coast, Moreton Bay, Brisbane and the Gold Coast.

[smartcode_project_cta:default project_id=141609]

Gardner Vaughan Group tops out Bask Bokarina apartments

Prolific Melbourne developer <a href="https://www.apartments.com.au/developers/hirsch-faigen">Hirsch &amp; Faigen</a> has launched its fourth new Gold Coast development in as many years.

<a href="https://www.apartments.com.au/developers/hirsch-faigen">Hirsch &amp; Faigen</a>, led by Daniel Faigen and backed by Eddie Hirsch, co-founder of United Petroleum, has unveiled The Eveleigh, on a prime 1,100 sqm site at 7-9 Surf Parade in the heart of Broadbeach.

<a href="https://www.apartments.com.au/new-apartments/the-eveleigh-broadbeach-7-9-surf-parade-broadbeach-qld-4218">The Eveleigh</a> will deliver 100 apartments across 31 levels, making it the company’s largest Gold Coast project to date. It builds on the success of its three earlier developments, <a href="https://www.apartments.com.au/buildings/hemingway-1267-1273-gold-coast-highway-palm-beach">The Hemingway in Palm Beach</a> and <a href="https://www.apartments.com.au/buildings/emerson-kirra-100-musgrave-street-coolangatta">The Emerson at Kirra</a>, both completed, and <a href="https://www.apartments.com.au/new-apartments/yves-mermaid-beach-7-9-mermaid-avenue-mermaid-beach">Yves Mermaid Beach</a>, which is nearing completion.

[smartcode_project:default project_id=149670 project_image_fid=360966]

The announcement of The Eveleigh affirms the company’s sustained confidence in the Gold Coast market which continues to remain undersupplied. It also increases the value of Hirsch &amp; Fa​igen’s Gold Coast development portfolio to more than $700 million since the company first entered the market in 2021 with Hemingway.

The company has enlisted its preferred architecture firm Rothelowman to design The Eveleigh, which will offer a thoughtfully curated lifestyle, including a substantial wellness precinct, communal recreation areas, children’s play spaces, work-from-home facilities, and shared lounge and dining areas.

[smartcode_project:default project_id=149670 project_image_fid=360965]

Designed for the prime market demographic of downsizers and interstate lifestyle investors in mind, The Eveleigh has been crafted to offer an increasingly rare blend of affordable luxury in a tightly held market. Uniquely positioned in the heart of the Gold Coast’s most sought-after lifestyle suburb of Broadbeach, the project will also boast uninterrupted beach and hinterland views.

The Surf Parade site is just a short walk to the bustling Broadbeach dining and retail precinct, Pacific Fair, The Star Gold Coast and convention centre, and an easy stroll to Kurrawa Beach and the recreational amenity of Pratten Park on the Broadbeach foreshore.

[smartcode_project:default project_id=149670 project_image_fid=360975]

“We’re excited to be proceeding with our fourth project on the Gold Coast in what is certain to become the new luxury precinct in Broadbeach,” says Anthony Bueti, the CFO of Hirsch &amp;a​mp; Faigen and a shareholder of the group.

“With the likes of Mosa​ic and Abedian &amp;a​mp; Co also launching quality projects in the area, the transformation will cement Broadbeach as the premier lifestyle and amenity suburb on the Gold Coast.

"After four years in the Gold Coast market, and with three successful projects completed, The Eveleigh is the product of everything we have learned to love about the Gold Coast and it will be an incredible addition to our growing portfolio in one of the most vibrant property markets in the country. We continue to remain very confident in the high-end Gold Coast property market.”

Urban Activation Director Matt George is handling sales for The Eveleigh, having sold out The Emerson, The Hemingway, and Yves, all before construction was completed.

Melbourne builder MAXCON has already commenced construction on The Eveleigh. They are forecasting a mid-2028 completion.

[smartcode_project_cta:default project_id=149670]

Hirsch & Faigen unveils The Eveleigh in Broadbeach

Two years after securing development approval for the final stage of its award-winning Thornton Precinct on the doorstep of Penrith Station, Urban Property Group is set to launch <a href="https://www.apartments.com.au/new-apartments/mayfair-on-penrith-172-lord-sheffield-circuit-penrith-nsw-2750">Mayfair on Penrith</a>, around 400 apartments designed to reflect two of Sydney’s most iconic structures.

The builder-developer has continued refining the design plans for the two-building development on a significant 8,280 sqm site on Sheffield Circuit, recognising the importance of the prime parcel as one of the closest developable sites to the station.

UPG enlisted architecture firm SJB to design the project. The team said they drew inspiration from both the General Post Office in Martin Place and East Circular Quay to help shape the design. The two-level colonnade, in particular, reflects the famous GPO building, which dates back to the 1860s.

[smartcode_project:default project_id=136726 project_image_fid=362014]

There will be one-, two-, and three-bedroom apartments on offer, with interiors by Cox Architecture. Residences will sit above a retail podium featuring hospitality and lifestyle operators such as One Playground and Volcano’s Steakhouse, contributing to an activated ground plane within the broader Thornton precinct.

A communal rooftop with a pool and views towards the Blue Mountains will provide shared open space for residents. The development is positioned between Ron Mulock Oval and Westfield Penrith, with the Nepean River and Great River Walk also nearby, placing daily amenity and green space within walking distance.

&nbsp;

[smartcode_project:default project_id=136726 project_image_fid=362015]

Mayfair is being delivered by Urban Property Group, a family-owned developer and builder with nearly 40 years’ experience across Sydney. The project will be the first in Penrith to be offered with Resilience Insurance’s 10-year Latent Defects Insurance (LDI) policy, which Urban Property Group has adopted across a number of its recent developments. The developer also has a 4.5-star iCIRT rating, one of the best ratings in market providing further confidence to buyers.

Urban Property Group CEO Patrick Elias said providing additional assurance to off-the-plan buyers has become increasingly important.

“Anything we can do to give confidence in our product is a plus,” Elias told Apartments.com.au.

“Consumers are a lot more weary and a lot more concerned in buying off the plan than they ever have been. They’re making their single large investment, which is their home, and providing confidence is something that we feel is paramount.”

[smartcode_project:default project_id=136726 project_image_fid=362020]

The LDI policy provides a 10-year warranty covering structural defects, with independent inspections carried out during construction and protection for owners if defects arise post-completion.

Mayfair represents Urban Property Group’s sixth and final development within Thornton, consolidating the masterplanned precinct immediately east of the station.

The developer, which builds its own projects, has already commenced construction. SRM Residential is handling the sales campaign.

[smartcode_project_cta:default project_id=136726]

Urban Property Group to close the curtain on award-winning Thornton precinct with Mayfair on Penrith release

Household Finance

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The latest ratios of household finances highlight that the ratio of debt to disposable income is at a record high however, the value of household assets is also at a record high level.
With record low interest rates, the ratio of interest payments to disposable income is the lowest it has been since early 2003.
The ratio of household and housing debt to disposable incomes are each at historic highs of 186.3 percent and 133.8 percent respectively with the ratios increasing by 3.4 percent and 4.3 percent over the past year; 
Over the period from 1988 to 2015 standard variable mortgage rates have fallen dramatically and that has surely contributed to household’s preparedness to take on more debt.
<a href="/images/2016/03/31/Screen%20Shot%202016-03-31%20at%201.11.34%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/31/Screen%20Shot%202016-03-31%20at%201.11.34%20PM.png" alt="">
 
Over recent years the ratio of interest payments to disposable income has been falling with the ratios for households and housing now sitting at their lowest levels since 2003. The higher ratio of interest payments currently compare to 1988 when interest rates were substantially higher.
This is reflective of the much higher cost for household assets, particularly the cost of residential housing.
The data shows that although households have significant debt, particularly for housing, the value of the assets they hold is substantial. The ratio of household debt to disposable income is currently 186.3 percent however, the ratio of household assets to disposable income 862.8 percent, the highest it has ever been.
Similarly, the ratio of housing debt to disposable income is 133.8 percent however; the ratio of housing assets to disposable income is 471.3 percent.
What is interesting is that the ratio of household assets to disposable income is still lower than its previous peak in December 2007 at 476.2% percent, however, it is nudging back up towards its previous record high.
The value of household assets is significantly greater than the value of the debt. Based on this data, the ratio of household debt to assets is 21.6 percent and the ratio of housing debt to housing assets is 28.4 percent.
<a href="/images/2016/03/31/Screen%20Shot%202016-03-31%20at%201.16.17%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/31/Screen%20Shot%202016-03-31%20at%201.16.17%20PM.png" alt="">
 
Australian households are heavily indebted due largely to residential housing and while high; the value of the assets held is much greater than the debt. It’s important to consider that this is a national view.
Across different regions the ratios are likely to be substantially different. Furthermore, lower interest rates and a fairly strong labour market over recent decades have contributed to a willingness to borrow. Should either of these factors to change it could lead to a dramatic deterioration in the value of these assets while of course the debt would remain.
Importantly, mortgage arrears remain low and the Reserve Bank has reported that the typical mortgage holder is currently more than two years ahead on their mortgage repayments. This coupled with higher rates of household savings provide a potential buffer if unemployment were to rise sharply or interest rates began to increase.
Cameron Kusher is research analyst for CoreLogic RP Data. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.
 
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ckusher-ujnxiKuFQs

Household and housing debt reach new record highs: CoreLogic RP Data's Cameron Kusher

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EXPERT OBSERVER
Large inflows of relatively young migrants have supported population growth and increased the share of the population aged 25–34 over the 2010s (Graph 2).[1] Despite this, the population has continued to grow older on average because the large baby boomer generation have begun to move into the 65 and over category and because of the ongoing trend increase in life expectancy. By contrast, people aged 35–54 have made only a very modest contribution to growth in the population, unlike in prior decades when the baby boomers moved through this age group. As a result, the number of people at retirement age per 100 working-age people (those aged between 15 and 64) has risen from around 20 to 25 over the past decade and is expected to rise further over the next decade.
<div> </div>
<img src="https://www.rba.gov.au/publications/bulletin/2020/mar/images/graph-0320-8-02.svg" alt="Graph 2: Changes in Population Age Segments" width="620" height="539">
Alongside these demographic developments over the past decade, there have been noticeable changes in key economic indicators for the household sector. Disposable income grew at a reasonably strong pace over the 1990s and 2000s, but income growth has been subdued over the 2010s (Graph 3). Growth in household consumption has also slowed. The saving ratio increased noticeably starting from the mid 2000s, but has declined more recently. A range of structural and cyclical factors have contributed to these trends. These include: the global financial crisis; the mining boom and its unwinding; higher levels of household debt; weakness in non-labour income; growth in household income tax revenue; and the recent downturn in the housing market.[2] Considering the contribution demographics have made to these trends, alongside these other factors, can help us further understand developments to date and how they might evolve in the future.
<div> </div>
<img src="https://www.rba.gov.au/publications/bulletin/2020/mar/images/graph-0320-8-03.svg" alt="Graph 3: Household Consumption and Income" width="620" height="500">
This article uses an Australian Bureau of Statistics (ABS) dataset that combines household-level information from the Household Expenditure Survey (HES) and the Survey of Income and Housing (SIH) with the national accounts to explore what effect demographic changes are likely to have had on household consumption and income over recent decades.[3] In this dataset, the relevant household information, such as age, is grouped according to a designated ‘household reference person’.[4] This dataset is broadly representative of the Australian household sector and includes persons living in non-private dwellings (such as nursing homes) and persons in very remote communities, who are often out-of-scope in micro datasets.[5]Consistent with the changes in the aggregate population, the share of households with reference persons' aged 55 and above in this dataset has increased from around one-third in 2004 to nearly half in 2018. The descriptive statistics offered by these data do not allow demographic effects to be isolated from other variations between households that may have been correlated with age. Nonetheless, they allow an examination of the average differences between households of different ages and how those differences contribute to the aggregate household sector and economy.
Income and consumption tend to decline with age …
Some portion of the slowing in consumption growth over the past decade is likely to be due to the ageing of the population. This is because the distribution of average household consumption by age in Australia follows a hump-shaped pattern: spending generally increases through the working life of a household, rising noticeably for households aged 35–54 in the stage of their life where many households support children and then declines once they retire. The decline in consumption is particularly pronounced for households aged 65 and over (Graph 4).[6] The reasons for a reduction in average spending for the 65 and above category would vary by household, but some likely explanations include a reduction in income as people enter retirement (discussed further below), lower weekly expenses (such as transport and eating out) after exit from the workforce, no longer needing to support children and actual or perceived inadequate savings for retirement.[7] The decline in the consumption of older households is not as large when incorporating social transfers provided by the government (discussed further below).
<div> </div>
<img src="https://www.rba.gov.au/publications/bulletin/2020/mar/images/graph-0320-8-04.svg" alt="Graph 4: Real Household Consumption" width="620" height="519">
The ageing of the population is also likely to have made some contribution to the slowing in income growth over the past decade. Similar to the distribution of consumption by age, household income generally increases through the working life of a household and then declines as they approach retirement (Graph 5). Households aged 65 and above typically have lower levels of income than those aged 25–54, and around 40 per cent of households 65 and over are in the lowest income quintile.[8] However, these older households are typically wealthier; only 25 per cent are also in the lowest two wealth quintiles.
<div> </div>
<img src="https://www.rba.gov.au/publications/bulletin/2020/mar/images/graph-0320-8-05.svg" alt="Graph 5: Real Household Income" width="620" height="536">
However, stronger income growth over the past decade has supported higher consumption growth for older households
The impact of the growing number of older households on aggregate consumption has been partly mitigated by a shift in the shape of the lifetime consumption distribution over the past decade. Average consumption per household aged 55 years and above has grown nearly twice as fast as the average of other households (Graph 6). In 2017/18, households aged 55–64 consumed more on average ($123,000) than those aged 35–44 ($111,000), although less than those aged 45–55 ($128,000). Stronger consumption growth for older households has partly reflected stronger growth in their incomes, compared with other age groups. Changes in household composition (such as children staying at home for longer or increased life expectancy) may be another contributing factor to consumption growth per household.
By contrast, the youngest households (those aged 24 and below) on average saw no growth at all in their consumption and a decline in their real income in the six years following the global financial crisis. The smaller share of the population comprised of these households, relative to prior decades, means that the effect on aggregate consumption has been smaller than it otherwise would have been.
<div> </div>
<img src="https://www.rba.gov.au/publications/bulletin/2020/mar/images/graph-0320-8-06.svg" alt="Graph 6: Real Household Consumption" width="620" height="505">
Aggregate growth in household disposable income has slowed noticeably over the past decade and has been lower than consumption growth for most of the past five years. But, as noted above, income growth across the age distribution has varied. Income growth was stronger for older households than for younger ones (Graph 7).[9] For example, households aged 15–24 had more disposable income than households aged 65 and over in 2003/04, but in 2017/18 earned about the same, and they still had significantly less wealth. As in the case of consumption, stronger growth in older households' incomes has reduced the effect of the ageing population on aggregate income.
For households aged 55–64 years, a key driver of stronger growth in overall income relative to other households has been strong growth in labour income. This has been supported by increased participation in the labour force, mainly by women. The female participation rate for those aged 55–64 years has increased from around 30 per cent in 1999 to a little more than 60 per cent in 2020.[10] For households aged 65 and above, growth in income over the past 15 years has also been supported by strong growth in non-labour sources of income such as financial income, rental income and social assistance income.[11]
<div> </div>
<img src="https://www.rba.gov.au/publications/bulletin/2020/mar/images/graph-0320-8-07.svg" alt="Graph 7: Household Real Income Growth by Age" width="620" height="577">
Financial income has grown more strongly than any other source of household income over the past 15 years. All age groups have benefited, but older households benefited the most because they hold more financial wealth, on average. Total financial returns for households over this period would be even larger if capital gains were included, but financial income in the national accounts excludes capital gains. This understates the total financial returns of households, particularly for older households because they receive the largest share of their income from financial wealth.
Older households save less of their current income than younger households
Households across most age groups increased their rate of saving in the mid 2000s, likely driven by precautionary motives, lower expectations for future income growth and declines in wealth.[12] Over the following six years, households aged 35–44 years increased their rate of saving further while the rate of saving for older and younger households was relatively unchanged (Graph 8). While older households generally save less than younger households, older households still had positive savings over the past 15 years, on average.
<div> </div>
<img src="https://www.rba.gov.au/publications/bulletin/2020/mar/images/graph-0320-8-08.svg" alt="Graph 8: Household Saving Ratio" width="620" height="516">
Since 2015/16, the aggregate saving rate in Australia has declined, as disposable income growth has been weaker than consumption growth. While distributional data on saving are not available for the past couple of years, historical experience suggests that demographics are likely to have contributed in some part to the further decline in the saving rate since 2016, as the share of older households, who save less, has increased. The relative increase in the saving rates of younger households over this time has mitigated this effect on the aggregate saving rate. A simple scenario that uses 2015/16 saving per household and population shares from 2003/04 suggests that in the absence of changes in demographics over this time, the saving rate would have been 1 percentage point higher in 2015/16. As the population continues to age this may weigh further on the saving rate.
Superannuation has also supported consumption by older households
Superannuation has played an important role in households' choices for smoothing consumption as they approach and enter retirement, giving them the option of drawing down their superannuation to fund spending above their income. The drawdown of super has supported older households to consume more on average (Graph 9).
<div> </div>
<img src="https://www.rba.gov.au/publications/bulletin/2020/mar/images/graph-0320-8-09.svg" alt="Graph 9: Household Finances" width="620" height="593">
Growth in household consumption has been supported by strong growth in asset prices, particularly for older households
Past research has identified a relationship between household wealth and consumption.[13] Net wealth has increased for all age groups, although the largest gains in dollar terms have accrued to older households (Graph 10). The average Australian household's wealth – under the definitions in the national accounts – increased in nominal terms from around $500,000 in 2004 to close to $1.1 million in 2015/16. The average wealth of households aged 15–34 increased by around $90,000 over this period, while for households aged 55 and above it increased by $630,000. Older households have accumulated considerably more wealth than households of the same age in the past, consistent with the increase in their consumption.[14]
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<img src="https://www.rba.gov.au/publications/bulletin/2020/mar/images/graph-0320-8-10.svg" alt="Graph 10: Net Wealth by Age" width="620" height="439">
Housing wealth increased strongly from 2003/04 to 2017/18, but debt owed by households grew even more strongly. While households aged 65 and above hold the least debt on average, these households (and those aged 55–64) have also seen a trend increase in the average housing debt per household relative to households of their age in the past, meaning that older households are now approaching or in retirement with more debt, on average (Graph 11).
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<img src="https://www.rba.gov.au/publications/bulletin/2020/mar/images/graph-0320-8-11.svg" alt="Graph 11: Real Household Debt" width="620" height="552">
The growth in housing wealth and debt in part reflects increased ownership of investment properties by older households. For older households, housing debt is roughly evenly split between owner-occupied and other properties, while for households aged 54 and below housing debt is largely for the property they live in. Data from the Australian Taxation Office indicate that increased ownership of investment properties over the past two decades has been driven by those aged 50 and above (Graph 12).
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<img src="https://www.rba.gov.au/publications/bulletin/2020/mar/images/graph-0320-8-12.svg" alt="Graph 12: Residential Rental Properties" width="620" height="539">
Social welfare has also supported consumption by older households
Households across all age groups are supported by sizeable social transfers from the state. Consideration of these public transfers gives a more complete picture of the set of resources available to households and helps explain the relatively resilient private consumption of older households because private income and consumption has been supplemented by support from the state.
Social assistance income provided to households aged 65 and above has increased around 30 per cent in real terms over the period 2003/04 to 2017/18 (Graph 13). Pension income has grown in excess of both the consumer price index and the wage price index since 2003, partly reflecting a number of policy changes.[15] Social assistance income declined a little in 2017/18 for older households, on average. This seems to reflect, at least in part, a larger share of part pensions.
Growth in nominal social assistance income has been subdued for all other households since 2003/04; in real terms, it has declined a little. The typical household aged 64 and below receives no social assistance income from the state. While unemployment benefits did increase a little towards the end of the mining boom, these only account for 15 per cent of social assistance.
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<img src="https://www.rba.gov.au/publications/bulletin/2020/mar/images/graph-0320-8-13.svg" alt="Graph 13: Social Assistance Income by Age" width="620" height="556">
Once other transfers, such as child care and education benefits (for example, subsidies for education), are included, the social welfare benefits are a little more evenly distributed across age groups in nominal dollar terms (Graph 14). These ‘transfers in kind’ also include aged care and benefits received through the National Disability Insurance Scheme. Social transfers in kind are captured by measures of government spending and are not included in household consumption growth. Total spending on these transfers has grown significantly over the past 15 years, which has been an important driver of growth in public consumption and economic activity.
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<img src="https://www.rba.gov.au/publications/bulletin/2020/mar/images/graph-0320-8-14.svg" alt="Graph 14: Social Welfare Benefits by Age" width="620" height="497">
Conclusions and considerations for the outlook
Australia, as in many countries, is experiencing large demographic shifts. Some portion of the slowing in aggregate consumption and household disposable income growth over the past decade is likely because of demographic changes as more households have moved into a stage of their lives where they earnt and spent less, on average. These effects have been smaller than what previous patterns of household spending would suggest because older households are spending more than in the past. This expenditure has been supported by relatively strong growth in income, large increases in wealth and withdrawals from superannuation.
Over the coming decade, a further strong increase in the share of households aged 65 and above is expected. Further impacts on consumption and income are likely, although these are likely to happen over a number of years. The increase in young overseas migrants over the past decade should support the share of the population that are of working age over the coming decade. This has made Australia relatively well placed, compared with many other advanced economies, to adjust to the effects of an ageing population.
TOMAS COKIS AND KATE MCLOUGHLIN are staff at the RBA
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