Roseville is poised for a wave of new apartment development following the NSW Government's rezoning of land around Roseville Station under its Transport Oriented Development program.

The new planning controls have unlocked significant development potential within walking distance of the station, with a number of sites expected to be amalgamated and redeveloped in the coming years as developers seek to take advantage of the increased density allowances.

One of the more restrained developments in the precinct, and set among the first to be delivered having commenced well before the recent changes, is Hyecorp's Juliet. The boutique apartment project is already well under construction and remains on track to welcome residents by the end of the year, offering a markedly different proposition to many of the larger-scale developments now likely to emerge across the suburb.

[smartcode_project:default project_id=7395 project_image_fid=278194]

<a href="https://www.apartments.com.au/new-apartments/juliet-roseville-64-pacific-highway-roseville-nsw-2069">Juliet</a> will comprise just&nbsp;34 one-, two-, and three-bedroom apartments opposite Roseville Station. For Hyecorp, which has delivered projects across Sydney's Lower North Shore for more than three decades, Roseville presented a rare opportunity to address a growing gap in the market.

"<a href="https://www.apartments.com.au/developments/roseville-nsw-2069">Roseville</a> has long been one of the North Shore's most tightly held and desirable suburbs, offering a unique combination of village charm, established greenery, excellent transport connections, and proximity to some of Sydney's best schools and lifestyle amenities," Hyecorp said.

"We recognised a growing demand from local homeowners seeking to downsize without leaving the community they have built their lives around. The location presented a rare opportunity to create homes that cater specifically to that buyer profile."

[smartcode_project:default project_id=7395 project_image_fid=278196]

The six-level development has been designed by <a href="https://www.apartments.com.au/architects/pbd-architects">PBD Architects</a> as a collection of residences that feel more like homes than apartments. The brief centred generous floorplans, abundant natural light, quality finishes, and strong connections to outdoor space.

PBD Architects drew inspiration from Roseville's established garden suburb character, creating a building that sits comfortably within its surroundings rather than dominating them. The architecture incorporates natural materials, soft forms, layered landscaping, expansive balconies, and generous setbacks to strengthen the connection between residents and the suburb's leafy environment.

"The focus was on designing spacious, house-like residences for discerning owner-occupiers and downsizers who wanted to remain on the North Shore without compromising on comfort, privacy, or design," PBD said.&nbsp;

"Every apartment was to feel considered, timeless, and highly functional."

[smartcode_project:default project_id=7395 project_image_fid=278195]

Inside, residences feature engineered timber flooring, stone kitchen benchtops and splashbacks, integrated Fisher &amp; Paykel appliances, ducted air conditioning, and large outdoor entertaining areas designed to take advantage of district and treetop views.

Residents will also have access to a rooftop barbecue and lounge area, alongside practical amenities including parcel lockers, EV charging capability, bicycle storage, a dog wash bay, and a basement car wash facility.

The majority of purchasers so far have been local owner-occupiers from Roseville, Lindfield, Chatswood, Killara, and the broader Upper North Shore, many of whom are transitioning from larger family homes.

"Buyers are looking for spacious, house-like apartments that allow them to downsize without feeling like they are sacrificing comfort or functionality," Hyecorp noted.

"They value large kitchens, generous living areas, ample storage, quality finishes, secure parking, lift access, and low-maintenance living."

[smartcode_project:default project_id=7395 project_image_fid=278204]

Juliet sits directly opposite Roseville Train Station and within walking distance of Roseville Village, while Chatswood's retail and dining precinct is only minutes away. The development is also surrounded by some of Sydney's most established schools, including Roseville College, Ravenswood, Pymble Ladies' College, and Knox Grammar, as well as nearby parklands and golf courses.

Juliet is currently more than 75 per cent sold ahead of its anticipated completion in late 2026.

[smartcode_project_cta:default project_id=7395]

Joel Robinson

Juliet to sit quietly amid Roseville apartment boom

Sherpa Property Group has unveiled the third instalment of its Flourish series, securing full approval for the two-tower, $500 million Flourish Soleira development in Palm Beach.

<a href="https://www.apartments.com.au/new-apartments/flourish-soleira-1150-1154-gold-coast-highway-palm-beach-qld-4221">Flourish Soleira</a> will rise from a prominent site in the commercial heart of Palm Beach, the long-time home of Cash Converters and a range of local retailers.

The project will introduce a new retail and dining precinct at ground level, beneath 286 apartments.

[smartcode_project:default project_id=150017 project_image_fid=370959]

“We’re very committed to not only providing affordable residential offerings that are much needed in Palm Beach, but also delivering a vibrant new commercial heart that complements the extraordinary growth of the southern Gold Coast,” Sherpa Property Group founder Christie Leet said.

The development will sit under Sherpa's Flourish brand, which is aimed at providing a pathway into the beachside suburb for locals, first-home buyers and downsizers. In a move designed to assist first-home buyers entering the market, Sherpa has reserved all one and two-bedroom, one-bathroom apartments exclusively for eligible first-home buyers.

[smartcode_project:default project_id=150017 project_image_fid=370964]

“Our vision through Flourish is to create a vibrant retail and lifestyle focal point within the Palm Beach centre zone, delivering thriving communities underpinned by lifestyle-rich locations,” Leet said.

“So far, Flourish has been an incredible success, and we hope to carry this momentum as we progress the next two Flourish projects in Palm Beach.”

[smartcode_project:default project_id=150017 project_image_fid=371430]

Located across 1150-1164 Gold Coast Highway and 3 Sixth Avenue, the development will comprise two towers. The northern tower will deliver 154 apartments, while the southern tower will add a further 132 residences, helping address ongoing demand for new apartments in the tightly held coastal suburb.

Flourish Soleira will also feature the most extensive rooftop amenity offering ever delivered in Palm Beach.

The two towers will be connected by a skybridge, with residents gaining access to a rooftop recreation deck featuring a full-width swimming pool, hot and cold plunge pools, wellness spaces, a gymnasium, private dining facilities, massage treatment rooms, barbecue areas, a basketball court, golf simulator, indoor and outdoor dining spaces, sun lounges and extensive landscaping.

LPS Group is expected to start construction later this year.

Sherpa is already well advanced on construction of its debut Flourish project, Flourish Amargo, located just around the corner from Soleira. Meanwhile, Flourish Oasis, positioned opposite Amargo, recently commenced construction and has nearly sold out its collection of 47 apartments.

[smartcode_project_cta:default project_id=150017]

Sherpa unveils $500m mixed-use Palm Beach precinct, Flourish Soleira

Are mortgage holders set to get a reprieve from the RBA in 2026?

Big Four bank NAB believes so. They are now expecting the next move from the RBA to be a cut, rather than a hike, which they had pencilled in for August. They are unsure of the timing of the cut however, they note in their latest&nbsp;NAB Economics RBA Watch.

NAB Chief Economist, Dr Sally Auld, said recent data suggests the economy has lost momentum and the outlook for rates has shifted, noting that the broader economic backdrop has changed since earlier in the year.

“The next move in the cash rate is likely to be down, but the timing is uncertain," Dr Auld said.

"In February, growth was above trend, the economy was operating above capacity and there was uncertainty over the restrictiveness of rates. None of these conditions exist today,” she outlined.

Dr Auld said recent data pointed to softer momentum across the economy while acknowledging that at the same time, uncertainty remains a key feature of the outlook.

“Both Q1 GDP data and the NAB business survey suggest momentum in the economy has slowed, meaning that growth has likely peaked for the cycle. That said, we are cognisant there is still considerable uncertainty around the outlook, both with respect to activity and inflation.”

Dr Auld said inflation risks and labour market outcomes would be important to watch.

“On the prices side, we are still forecasting above target core inflation through to mid-2027. Margins will compress and weaker labour market outcomes are a risk.”

She said tighter financial conditions are expected to weigh on housing and activity.

“Tighter financial conditions will be reflected in a slowing in house price growth and housing credit growth. In summary, we have greater conviction that the next move in rates is down, but less conviction on the timing.”

Mortgage relief? NAB forecasts RBA rate cut, not hike, after softer economic conditions

A local downsizer has splashed $6.5 million on a penthouse in Perifa's Alex &amp; Willow development in Crows Nest. 
&nbsp; 
The purchaser sold their long-held family home in the area before embarking on a six-month search for the right apartment. After inspecting a range of options across the Lower North Shore, the buyer returned to <a href="https://www.apartments.com.au/new-apartments/alex-willow-crows-nest-82-90-alexander-street-crows-nest-nsw-2065">Alex &amp; Willow</a>. 
&nbsp; 
The buyer profile reflects the project’s broader purchaser mix. <a>Alex &amp; Willow</a> has attracted predominantly local downsizers looking to transition from larger homes without compromising on space or quality, alongside a smaller cohort of upsizers and investors drawn to the project’s location and design credentials. 
&nbsp; 
The milestone sale comes as the project, developed by&nbsp;<a href="https://www.apartments.com.au/developers/perifa">Perifa</a>&nbsp;and delivered by <a href="https://www.apartments.com.au/builders/versatile-made-construction">Versatile Construction</a>, both part of Versatile Group, reaches 60 per cent sold.

[smartcode_project:default project_id=6680 project_image_fid=371325] 
&nbsp; 
Eddie Mansour, Managing Partner of <a href="https://www.apartments.com.au/project-marketer/ray-white-projects">Ray White Projects</a>, said the result demonstrates not only a headline price but also depth of demand. 
&nbsp; 
“This is an exceptional outcome and a clear reflection of sustained buyer demand for premium, well-located downsizer product,” Mansour said.

“We’re seeing a consistent pattern of local homeowners selling family residences and reinvesting into high-quality apartments that allow them to remain within their community. Alex &amp; Willow has resonated strongly with this group because it offers genuine scale, thoughtful design and immediate proximity to the village.” 
&nbsp; 
The sale reflects a broader and consistent trend of local downsizers actively seeking high-quality, low-maintenance residences close to established village centres. Agents report that demand for this product type has remained resilient, particularly where developments offer a rare combination of scale, design quality and walkable amenity. 
&nbsp;&nbsp; 
Fabrizio Perilli, Managing Director of Perifa and Versatile Group, said the sale marks a defining moment for the project. 
&nbsp; 
“The penthouse sale is a strong endorsement of the quality we have delivered, alongside our partners, and the clear demand from local downsizers for premium, boutique residences in this location,” Perilli said.&nbsp; 
&nbsp; 
“Most importantly, we’re proud to see the Alex &amp; Willow community beginning to take shape. As we move closer to completion, we’re looking forward to welcoming residents and seeing the project come to life.”&nbsp;

[smartcode_project:default project_id=6680 project_image_fid=338516] 
&nbsp; 
Designed by <a href="https://www.apartments.com.au/architects/nettletontribe">Nettleton Tribe</a> with interiors by <a href="https://www.apartments.com.au/interior-designers/richards-stanisich">Richards Stanisich</a>, Alex &amp; Willow is a boutique collection of generously sized two- and three-bedroom residences in the heart of Crows Nest village.&nbsp;

Completion is slated for early 2027.

[smartcode_project_cta:default project_id=6680]

Alex & Willow, Crows Nest penthouse sells off the plan for $6.5 million

Fresh from launching the first stage of its Wollongong precinct, <a href="https://www.apartments.com.au/new-apartments/keira-place-wollongong-120-122-smith-street-wollongong-nsw-2500">Keira Place</a>, builder-developer Urban Property Group has unveiled plans for the next phase of the masterplanned community.

Now on public exhibition through the NSW Government's Housing Delivery Authority pathway is a State Significant Development Application for a further 657 homes on the prominent gateway site opposite Beaton Park.

The proposal comprises three buildings, including two build-to-sell towers rising 25 and 30 storeys, delivering 391 apartments, alongside a 12-storey co-living building with 266 residences, making it one of the largest co-living proposals currently planned in regional New South Wales.

Of the apartments proposed in the build-to-sell towers, the majority, 310, are two-bedroom dwellings. The balance comprises 44 one-bedroom apartments and 37 three-bedroom residences. Apartment sizes range from around 50 sqm for one-bedroom homes to approximately 90 sqm for three-bedroom apartments.

<img alt="Smith St" data-entity-type="file" data-entity-uuid="19347059-1612-41a0-9c74-b86a657237f8" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-10%20at%2010.02.18%E2%80%AFAM.png?VersionId=sWXnaCcA.cIC6N8YT1dg5pJ2e1V3Z6z7" />

The submission says the proposal has evolved significantly from its original Housing Delivery Authority application following extensive consultation with the State Design Review Panel and Wollongong City Council.

The final scheme has been designed to align with the emerging vision for the Flinders Street Precinct, an area identified by Council as a future high-density mixed-use neighbourhood capable of accommodating substantial housing growth close to transport, employment and community infrastructure.

According to the design report prepared by COX Architecture, the development aims to "deliver a built outcome consistent with the future character of the Wollongong CBD while responding to the site's unique constraints and opportunities."

"Our vision for the next phase of the site evolution in Wollongong is grounded in three design pillars that guide the design response: place, natural environment and celebration," COX said.

"Inspired by its surroundings and grounded in the stories of place on Wodi Wodi Country, the design proposal acknowledges the established character of its setting while creating a unique and timeless identity that sits harmoniously within it.

"The design proposal responds to its specific site conditions, acknowledging the vegetation, climate, wind conditions and solar access of the site."

The architecture responds directly to the site's position between Wollongong's urban core and its natural landscape setting.

COX identified views towards Mount Keira and the Illawarra Escarpment as defining features of the site, while the upper levels of the towers will also capture expansive views across the city and out to the Pacific Ocean.

The design team has positioned the tallest buildings closer to the rail corridor, where overshadowing impacts can be better managed while establishing a landmark built form on the northern approach into the city.

<img alt="Smith St" data-entity-type="file" data-entity-uuid="79580d5b-500c-4ebf-9629-797146a4a694" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-10%20at%209.51.59%E2%80%AFAM.png?VersionId=WbTB1EKSG.KDfsfz0F3wp1QVa2oCMGR5" />

Urban Property Group secured the 11,000 sqm Smith Street site in 2022 and has since progressed plans for the broader Keira Place precinct.

Construction recently commenced on the first stage of Keira Place, which will deliver 150 apartments across two residential buildings, including 27 affordable housing apartments and 18 specialist disability accommodation dwellings, alongside activated ground-floor retail and commercial space.

Urban Co-CEO Patrick Elias said the commencement of construction marked a significant milestone for Wollongong and reflected the developer's long-term commitment to regional cities.

"Today's groundbreaking is about turning approvals into homes and moving quickly to deliver much-needed housing in Wollongong's city centre," Elias said.

"Keira Place will provide a diverse mix of homes close to jobs, transport and services, while setting a high benchmark for quality, durability and consumer protection."

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/groundbreaking-marks-start-of-construction-at-keira-place-in-wollongong-cbd">Groundbreaking marks start of construction at Keira Place in Wollongong CBD</a>

&nbsp;

&nbsp;

&nbsp;

Urban Property Group unveils trio of towers for next stage of new Wollongong precinct, Keira Place

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>.
 
</body></html>

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]
<div> </div>
<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).
<div> </div>
<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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