<p><a href="https://www.apartments.com.au/developers/jl-place">JL PLACE</a>'s Veil Brighton is approaching its final months of construction, with the nine-townhouse development at 17 Rooding Street expected to complete in December 2026.</p>

<p>The milestone is bringing the boutique project closer to becoming a finished part of the <a href="https://www.apartments.com.au/developments/brighton-vic-3186">Brighton</a> streetscape, with much of Brighton's everyday amenity within a short walk.</p>

<p>Palace Cinema, Coles Supermarket and North Brighton Station are all around five minutes on foot from <a href="https://www.apartments.com.au/new-townhouses/veil-brighton-17-rooding-street-brighton-vic-3186">Veil</a>, alongside numerous cafés, restaurants and bars. The station provides a direct rail connection toward Melbourne's CBD, while Bay Street and the wider Brighton retail and dining network add to the range of services accessible without relying on a car for every trip.</p>

<p>"The location was fundamental to the project. Brighton is an established suburb where many buyers already have strong connections to the area and want to remain close to the people, places and amenities that form part of their everyday life," the developer said.</p>

<p>"Veil sits in a highly walkable part of Brighton, with a Walk Score of 90/100."</p>

<p>For buyers looking to right-size within Bayside, that level of walkability adds to the appeal of a more manageable way of living. Everyday shopping, dining, entertainment and public transport can be accessed without relying on the car for every trip, while residents remain connected to the places and routines that make Brighton familiar. It allows buyers to simplify day-to-day life without giving up the convenience, amenity and connections they already value.</p>

<p>[smartcode_project:default project_id=7877 project_image_fid=355754]</p>

<p>As completion approaches, the architecture, landscaping and material palette are progressively becoming visible on site, giving prospective purchasers a clearer view of the finished development beyond its plans and renders.</p>

<p>Veil comprises nine townhouses, predominantly three-bedroom homes with between 2.5 and 3.5 bathrooms, two car spaces and, depending on the residence, study areas and private outdoor space. Selected homes include a bedroom on the ground floor.</p>

<p>Veil occupies a middle ground between detached housing and apartment living, retaining private gardens, storage and secure parking within a more manageable residential format.</p>

<p><a href="https://www.apartments.com.au/architects/schmidt-pang-architects">Schmidt &amp; Pang</a> designed the architecture around natural light, ventilation, privacy and practical use of space. From Rooding Street, the façade has been composed to read as a cohesive residential building rather than nine individual townhouses, with landscaping by <a href="https://www.apartments.com.au/landscape-architect/john-patrick-landscape-architects">John Patrick Landscape Architects</a> integrated throughout the site.</p>

<p>Inside, natural stone, oak flooring, integrated joinery and brushed nickel finishes establish a restrained material palette, while kitchens include Miele appliances and substantial storage such as pantries. Walk-in robes and dedicated study spaces have also been incorporated across the collection.</p>

<p>[smartcode_project:default project_id=7877 project_image_fid=355852]</p>

<p>The project team said the planning of the homes has been informed by how the spaces function for both daily routines and larger gatherings.</p>

<p>"Our new homes owners at Veil have enjoyed the attention to detail in creating efficient layouts that use every space well. Hosting Christmas lunch and large family gatherings is an ease when care is taken to consider how people really live and entertain."</p>

<p>Private landscaped gardens extend the living spaces outdoors, while secure basement parking and bicycle parking are provided below. The homes have also been designed to achieve a 7-star energy rating, supported by double glazing, high-quality insulation, natural ventilation, LED lighting, water tanks and water-efficient fittings. Each residence is backed by a 10-year building guarantee.</p>

<p>Veil is being built by <a href="https://www.apartments.com.au/builders/jeniton">Jeniton</a>.&nbsp;Limited-time stamp duty savings are also currently available on selected purchases at Veil, adding another consideration as the project moves toward completion.</p>

<p>[smartcode_project_cta:default project_id=7877]</p>


Joel Robinson

Veil Brighton nears completion in one of the suburb's most walkable pockets

<p><a href="https://www.apartments.com.au/developers/mosaic-property-group">Mosaic Property Group</a> has recorded 134 sales worth just over $400 million in two months of pre-release activity at The Riversdale, as the developer brings its $750 million South Brisbane riverfront project to the broader market.</p>

<p>The sales represent more than 60 per cent of the project's 213 apartments, with Mosaic reporting the majority of purchasers have been local owner-occupiers and downsizers.</p>

<p><a href="https://www.apartments.com.au/new-apartments/the-riversdale-by-mosaic-south-brisbane-91-montague-road-south-brisbane-qld-4101">The Riversdale</a> will rise 39 storeys from its north-facing site at 91 Montague Road, delivering a mix of two, three and four-bedroom apartments alongside a collection of Mosaic's premium Masterpiece Series Sky Homes.</p>

<p>[smartcode_project:default project_id=151614 project_image_fid=371872]</p>

<p>The early buyer response comes ahead of the wider evolution of the northern end of Montague Road, where The Riversdale will be one of the first major residential projects delivered within an emerging riverfront precinct.</p>

<p>Directly adjoining the development is a planned 7.1-hectare mixed-use precinct, set to introduce new residences, parkland and public realm along the river's edge. The Riversdale's position directly on the Brisbane River gives it a relationship with the waterfront that Mosaic says cannot be replicated by future buildings within the precinct.</p>

<p>The site is also the result of a years-long pursuit by Mosaic. The developer first earmarked the <a href="https://www.apartments.com.au/developments/south-brisbane-qld-4101">South Brisbane</a> property in 2018, reflecting what Founder and Managing Director Brook Monahan has described as a deliberately patient approach to acquiring development sites.</p>

<p>[smartcode_project:default project_id=151614 project_image_fid=372083]</p>

<p>"We aren't opportunistic," Monahan previously told Apartments.com.au.</p>

<p>"Every site purchase is carefully considered. As seen with Kangaroo Point and South Brisbane, it can take years to eventuate. There are sites we're looking at now that we may not secure for several years."</p>

<p>Designed in collaboration with <a href="https://www.apartments.com.au/architects/bureauproberts">Bureau Proberts</a>, The Riversdale has been shaped around the qualities of the riverfront site, with apartments oriented to capture northern light and uninterrupted Brisbane River views.</p>

<p>Generous floorplans and expansive balconies extend the living spaces towards the river, while natural materials and a restrained interior palette have been selected with longevity in mind.</p>

<p>[smartcode_project:default project_id=151614 project_image_fid=371890]</p>

<p>Residents will have access to a level of amenity more commonly associated with world-class hotels and private members' clubs, with almost 3,000 sqm dedicated to wellness, connection, recreation and everyday convenience.</p>

<p>At ground level is a business lounge, private meeting rooms and dedicated workspaces. Mid-tower is a wellness sanctuary featuring magnesium hot and cold plunge pools, sauna, steam room, infrared therapy facilities, a Pilates and yoga studio, and a commercial-grade gymnasium.</p>

<p>Crowning The Riversdale is a rooftop featuring a 35-metre swimming pool with lap lane and spa, outdoor dining and seating terraces, firepit lounges and views of the city, river and Mount Coot-tha.</p>

<p>A private members' club-inspired retreat offers private dining rooms, a whisky lounge, media rooms and immersive entertainment experiences. Completing the amenity offering are two hotel-style guest suites and a resident-exclusive electric vehicle fleet and car-share program.</p>

<p>[smartcode_project:default project_id=151614 project_image_fid=371877]</p>

<p>The Riversdale sits at the northern end of Montague Road between South Bank and West End, around 1.3 kilometres from the Brisbane CBD, providing access to the city's major cultural, dining and recreation precincts.</p>

<p>It becomes Mosaic's largest Brisbane project to date and adds to a pipeline already under construction across the city.</p>

<p>In Brisbane, the developer is currently delivering The Bedford and The Carter at Kangaroo Point, both of which are approaching sell-out, with a further four projects being delivered on the Gold Coast. Mosaic has completed more than $2 billion in projects since 2012 and has a further development pipeline exceeding $2 billion across South East Queensland.</p>

<p>Early works are underway at The Riversdale, which will be delivered by Mosaic's in-house construction division. Completion is anticipated in late 2029, with remaining apartments priced from $1.98 million.</p>

<p>[smartcode_project_cta:default project_id=151614]</p>


Mosaic records more than $400m in two months at South Brisbane's The Riversdale

<p data-end="459" data-start="179">Lender, fund manager and apartment developer Princeton has completed <a href="https://www.apartments.com.au/buildings/marque-rockdale-602-608-princes-highway-rockdale-nsw-2216">Marque Rockdale</a>, the first new apartment development in South Sydney to provide its owners with a 10-year Latent Defects Insurance policy, the most comprehensive insurance available for a new apartment building.</p>

<p data-end="459" data-start="179">The policy has been a key consideration for prospective purchasers of the 58 one-, two-, and three-bedroom apartments, strategically located between&nbsp;Rockdale Plaza and Rockdale Station.&nbsp;</p>

<p data-end="459" data-start="179">Buyers have also been drawn to the fact that it is one of few new apartment developments delivered in the suburb in the last 10 years, and the only one located on Princes Highway to be set well back from the street to reduce noise. There's also a communal rooftop, a rarity in the suburb, complete barbecue facilities, landscaped seating areas, a children's play zone and herb gardens.</p>

<p data-end="459" data-start="179">[smartcode_project:default project_id=136442 project_image_fid=374084]</p>

<p>Ray White Projects’ Matt Otway said buyer enquiry reflected the increasingly diverse and cosmopolitan population that has made Rockdale home.</p>

<p>“We’re seeing strong interest from a broad mix of buyers, including young professionals and people who have rented in Rockdale and the surrounding suburbs and now see Marque as an opportunity to buy a brand-new apartment in an area they already know,” Otway said.</p>

<p>“Proximity to the CBD and Sydney Airport is another key advantage particularly for buyers working in these locations who want the added convenience of living close by.”</p>

<p>Investors have also been attracted to the project, with rental yields of more than five per cent, which is considered a strong result for the Sydney market.</p>

<p data-end="1812" data-start="1706">[smartcode_project:default project_id=136442 project_image_fid=374090]</p>

<p data-end="2015" data-start="1814">Adding another layer to the buyer proposition is Marque's 10-year Latent Defects Insurance policy from Resilience Insurance, making it the only new apartment development in Rockdale to offer the cover.</p>

<p data-end="2210" data-start="2017">The policy protects apartment owners against major structural and waterproofing defects for 10 years following completion, giving Marque purchasers cover until early 2036 at no additional cost.</p>

<p data-end="2486" data-start="2212">The likelihood of defects emerging has also been mitigated through the Technical Inspection Service (TIS), which saw independent experts inspect the building at various stages throughout construction to identify potential issues during the build, rather than after the fact.</p>

<p data-end="2674" data-start="2488">SDSS, which provided the TIS, consistently ranked the construction quality at Marque, undertaken by iCIRT-rated builder Coplex, among the best across its extensive portfolio of projects.</p>

<p data-end="2674" data-start="2488">[smartcode_project:default project_id=136442 project_image_fid=374088]</p>

<p data-end="2838" data-start="2676">Otway said the LDI had become a major drawcard for buyers, particularly given Rockdale has seen relatively little new apartment development over the past decade.</p>

<p data-end="2986" data-start="2840">"Rockdale hasn't had a lot of new apartment buildings in the last decade, and has never had a project with 10-year defect insurance," Otway said.</p>

<p data-end="3097" data-start="2988">"Marque presents a truly rare opportunity at an affordable price point, so well connected to the Sydney CBD."</p>

<p data-end="3256" data-start="3099">One-bedroom apartments at Marque start from $735,000.</p>

<p data-end="3744" data-start="3576">[smartcode_project_cta:default project_id=136442]</p>


Marque Rockdale completes as South Sydney’s first apartments backed by 10-year defect insurance

<p>Sydney developer <a href="https://www.apartments.com.au/developers/odus">ODUS Property Group</a> is continuing to expand its local Gold Coast development pipeline, filing plans for a new 40-storey tower in the Southport CBD.</p>

<p>Odus, which bought two luxury Main Beach projects, now La Mer and Le Reve, to make its move into the booming Gold Coast apartment market, has secured its third site. But it is tweaking the plans for a previously proposed 50-storey skyscraper, now seeking to deliver 40 storeys.</p>

<p>The project, dubbed <a href="https://www.apartments.com.au/new-apartments/80-marine-parade-74-80-marine-parade-southport-qld-4215">80 Marine Parade</a>, sits on a prime&nbsp;2,032 sqm amalgamated corner site at 74–80 Marine Parade and 4 Welch Street, across the road from the Gold Coast Aquatic Centre. It will have unobstructed, never-to-be-built-out views to the east given its position opposite the Broadbwater Parklands.&nbsp;</p>

<p>The plans are for 316 apartments, ground-floor retail, and resort-style resident amenities. The project sits within Precinct 1 (Central Business District) of the Southport Priority Development Area, where high-density residential and commercial development is actively encouraged.</p>

<p>BGD, ran by Bayden Goddard and the architecture firm behind Le Reve, has revised the original concept plans, substantially reworking the built form. Basement parking has been replaced by an expanded podium designed to improve functionality while reducing the tower's overall visual impact.&nbsp;&nbsp;</p>

<p><img alt="First look: Odus Property Group plots landmark 40-storey tower for Southport's Broadwater gateway" data-entity-type="file" data-entity-uuid="0f13d065-2cf5-45ec-aa17-1a03754d93d8" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Southport%20da%202.png?VersionId=.9QS2n7kBc_U3PyaI247uOyNSXIqnXSE" /></p>

<p>The tower rises above the eight-storey landscaped podium with a distinctive architectural language defined by sweeping arches, integrated greenery, bronze-toned glazing, and a sculptural rooftop crown.</p>

<p>The development will comprise 104 one-bedroom apartments, 208 two-bedroom apartments, and four four-bedroom penthouses across levels 9 to 36. Apartments are designed to accommodate both permanent residents and short-term accommodation within the same building.</p>

<p>A double-height lobby and reception will anchor the ground floor alongside a 23 sqm food and drink outlet, activating the Marine Parade frontage.</p>

<p>Parking will be accommodated within the podium, providing 288 vehicle spaces and 74 bicycle spaces, accessed from Welch Street.</p>

<p><img alt="First look: Odus Property Group plots landmark 40-storey tower for Southport's Broadwater gateway" data-entity-type="file" data-entity-uuid="d7528b91-2c47-4094-98b3-5eecbacc0041" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Southport%20da%20podium.png?VersionId=efF5oWs4T9PDvxJwJEDHu5kSQ5eE3IBy" /></p>

<p>Residents will have access to an extensive suite of amenities spread across multiple levels. A podium recreation deck will include a swimming pool, spas, sauna, steam room, cinema, residents' lounge and children's games room, while a second wellness level near the top of the building will feature a gym, co-working spaces, reading room, dining areas and communal kitchen. Extensive podium landscaping wraps the building to soften the built form and strengthen its interface with the surrounding streetscape.</p>

<p>The planning report notes the project responds directly to Southport's ongoing urban transformation.</p>

<p>"Consistent with much of Southport, the surrounding area is undergoing significant transition, with many older low-rise developments progressively being redeveloped for higher-intensity urban outcomes, as envisaged within Precinct 1."</p>

<p>It also states that the proposal "will contribute to a defined and legible eastern gateway to the Southport CBD, reinforcing the area's high-density urban character while maintaining a strong visual connection to the adjoining public open space network."</p>

<p><img alt="First look: Odus Property Group plots landmark 40-storey tower for Southport's Broadwater gateway" data-entity-type="file" data-entity-uuid="0b9fdebd-4b35-400b-a287-6bd1cdbcdb1b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Southport%20da.png?VersionId=4LG35XR5mfir7jvG2TShtQx.utMLYBxu" /></p>

<p>Located opposite the Broadwater Parklands, the site enjoys immediate access to the Gold Coast Aquatic Centre, Australia Fair Shopping Centre, TAFE Queensland Southport campus, the G:link light rail corridor and Southport's established commercial precinct. The location places future residents within one of the Gold Coast's fastest-evolving mixed-use centres, where numerous high-rise residential projects are reshaping the CBD skyline.</p>

<p>Odus is headed by development professionals Byron Sakha, Jarrod Younan and Sebastian Younan. The Younans also head family-owned builder Nazero Constructions, established in the 1960s.</p>

<p>They are currently delivering La Mer, 24 luxury apartments on Main Beach Parade, and Le&nbsp;Rêve, on the same street but on the prized beachfront side of the sought-after strip.</p>


ODUS plans landmark 40-storey tower for Southport's Broadwater gateway

<p>A boutique collection of just 10 residences could become the catalyst for the next phase of renewal along the southern end of Surfers Paradise Boulevard, with new plans laid for a mixed-use tower designed to transform a long-vacant site.</p>

<p>The proposal for <a href="https://www.apartments.com.au/new-apartments/3098-surfers-paradise-boulevard-surfers-paradise-qld-4217">3098 Surfers Paradise Boulevard</a> has been conceived as more than a standalone residential project. Designed by <a href="https://www.apartments.com.au/architects/bda-architecture">BDA Architecture</a>, the development aims to spark the revitalisation of what the design team describes as the "South Boulevard" precinct, creating an active streetscape with retail uses at ground level beneath a collection of full-floor luxury residences.</p>

<p>The application, by PR Property Holdings, an entity directed by the Brisbane-based Ryan and Petrovic families, seeks approval for a 17-storey, 62.2-metre mixed-use development on a compact 427 sqm site between Surfers Paradise Boulevard and Appel Street.</p>

<p>The project will comprise just 10 apartments, including eight full-floor residences and two duplex apartments, positioned above a two-level retail podium. Three podium parking levels will accommodate 26 vehicle spaces, while a recreation deck is proposed on Level 4.</p>

<p><img alt="First look: PR Property Holdings plans boutique apartment tower to kickstart Surfers Paradise's 'South Boulevard' revival" data-entity-type="file" data-entity-uuid="46cfa37d-5051-4449-8d8e-6724f8ca0d59" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Article%20Feature%20Image%20%28Grid%29_8.png?VersionId=e7UkeV1eTZAC2lXhdq72E3jpUbwiFD2t" /></p>

<p>Rather than pursuing apartment volume, the proposal focuses on large-format homes with a slender tower form intended to maximise outlooks while limiting visual bulk.</p>

<p>BDA Architecture said the proposal has been designed to become an urban renewal catalyst for the precinct.</p>

<p>"The ambition of 3098 Surfer's Paradise is that it provides the catalyst for incremental infill redevelopment and upgrade of what is coined the 'South Boulevarde' of Surfers Paradise which connects to the beating heart of Cavill Avenue."</p>

<p>The architects added: "An incremental approach to development that provides quality ground plane interface, human scale design, integrated subtropical landscape and semipublic permeable frontage can over time entirely upgrade a precinct."</p>

<p>The architecture adopts soft curves, articulated balconies and a slender tower profile rising from a human-scaled podium. The design report describes the project as delivering "bespoke residences of enduring distinction, sculpted with precision and quiet sophistication," with a focus on timeless coastal architecture.</p>

<p>The application also includes retail tenancies addressing Surfers Paradise Boulevard, reinforcing the site's role as an active mixed-use destination rather than a purely residential address. The planning report states the combination of the podium, landscaping and active frontage is intended to strengthen the pedestrian experience while contributing to the evolving character of the boulevard.</p>

<p>The site occupies a prominent position in the southern section of Surfers Paradise, directly opposite the G:link light rail corridor and within walking distance of Surfers Paradise Beach, Cavill Avenue, the Nerang River and Bruce Bishop Car Park. It is currently vacant, having previously accommodated a single-storey commercial building that was demolished in 2022. The planning report notes the surrounding area is characterised by a mix of commercial buildings and residential towers, with unlimited building height provisions applying under the Centre Zone.</p>

<p>The proposal also replaces an earlier 2022 approval for a restaurant and bar on the site, instead introducing a permanent mixed-use development that combines retail activation with boutique residential living.</p>


Boutique apartment tower to "kickstart" Surfers Paradise's 'South Boulevard' revival

Household Wealth

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<p>EXPERT OBSERVER</p>
<p>The ABS data showed that at the end of the March quarter, household net worth was $10.243 trillion.</p>
<p>While a large figure, household wealth has now fallen for two consecutive quarters and is -0.7% lower year-on-year. The $10.243 trillion in net worth is madeup of $12.701 trillion in assets and $2.458 trillion in liabilities. The recent fall in the value of assets at a time in which liabilities have continued to rise has led to the fall in net worth.</p>
<p>The Reserve Bank (RBA) analyses this data to produce a number of valuable ratios, including: debt, assets and interest payments to household disposable income.</p>
<p>These ratios highlight the impact of high levels of debt at a time in which asset values have fallen but the debt has not fallen at the same pace.</p>
<p>We’ve seen the ratio of household debt to disposable income continue to climb over the quarter, reaching a new historic high of 189.7%. The rise in household debt relative to incomes has certainly slowed; however, it continues to edge higher.</p>
<p>The ratio of housing debt to disposable income is recorded at 140.1% and was unchanged over the quarter. While it was unchanged over the quarter, it remains at an historic high level, highlighting that households remain very sensitive to the cost of mortgage debt.</p>
<p>Turning to the ratio of household assets to disposable income, it was recorded at 927.0% in March 2019. The ratio peaked at 961.7% in December 2017 and has trended lower since. The ratio of housing assets to disposable income peaked at 529.6% in December 2017 and as at March 2019; it was recorded at 483.5%.</p>
<p>The reduction in housing values has coincided with the period in which the ratio of household and housing assets has fallen which is no wonder when you consider housing accounts for around half of the value of household assets. </p>
<p>It's also important to consider is that while the value of assets are falling there has been no reduction in the ratios of debt to income which highlights that asset depreciation has been greater than debt reduction. As a result, the ratio of household debts to assets is at 20.5%, the highest it has been since December 2014 and the ratio of housing debt to assets is at 29.0%, the highest it has been since June 2013.</p>
<p>Despite the lowest interest rates since the 1960s, the ratio of interest payments to disposable income has trended higher years. As at March 2019 the ratio was recorded at 9.1% and although it has been steady for three quarters, interest payments relative to disposable income has trended higher on an annual basis</p>
<p>Furthermore, the ratio of interest payments to disposable income was last this high in September 2013. It is a similar story for the ratio of housing interest payments to disposable income, which is also trending higher, recorded at 7.6%, which is the highest ratio since June 2013.</p>
<p>With interest rates at generational lows there was perhaps, some expectation that households would use the low rates to pay off some debt however that has largely not occurred. With asset values recently falling the data shows that debt pay off has not been as rapid as the declines leading to a reduction in household wealth.</p>
<p>This data is to March 2019 and by the end of June 2019, there were some tentative signs that the declines in dwelling values were starting to level. While this means that there is likely to be a further decline in household wealth over the June quarter, it also suggests there is unlikely to be a meaningful reduction in household debt levels.</p>
<p>As such, household debt levels are likely to remain amongst the highest in the world. At the same time, the value of household assets remain substantially higher than the value of the debt. The cause for concern will be what happens if economic conditions deteriorate materially, leading to weaker labour market conditions and potentially creating some challenges around servicing such high levels of debt as unemployment rises.</p>
<p>Another medium to long-term consideration is a scenario where interest rates eventually start to rise. Households are generally able to service high levels of household debt while interest rates are at record lows, but eventually (probably not for at least several years) interest rates will rise.</p>
<p>If household debt levels remain high relative to incomes under a higher interest rate environment, the result could be weakness in household spending (as households dedicate more of their income towards servicing their debt) and potentially higher levels of financial stress amongst heavily leveraged households.</p>
<p><em>CAMERON KUSHER is the head of research for the Australian branch of CoreLogic</em></p>
<p><em>Kusher regularly posts on the <a href="https://www.corelogic.com.au/news" target="_blank">CoreLogic website</a>.</em></p>
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ckusher-ujnxiKuFQs

Australian Household wealth falling while debt remains: Cameron Kusher

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<p>Household financial comfort fell across regional Australia during the six months to December 2019, according to ME Bank’s latest Household Financial Comfort Report.</p>
<p>While ME Bank’s latest biannual survey showed the financial comfort of metropolitan households increased 3% to 5.76 out of 10 to near record highs – especially in eastern Australia – financial comfort for regional households fell 4% to 5.08, continuing a decline over the past year to approach its lowest point in the past eight years.</p>
<p>ME’s Consulting Economist, Jeff Oughton, said the gap in financial comfort between regional and metropolitan households had now reached a record 13%, almost twice the historical average of 7%.</p>
<p>“The sharp fall in financial comfort in regional areas is likely a result of ongoing drought and recent bushfire catastrophes, which have significantly lowered already low levels of financial comfort."</p>
<p>"‘Comfort with cash savings’ fell 9% and the ‘ability to deal with financial emergencies’ fell 7%, while long-term retirement comfort deteriorated, with ‘anticipated standard of living in retirement’ down 7%."</p>
<p>"Regional Queensland reported the largest fall in comfort, down 14% to 4.95, dipping below regional New South Wales (5.09) and Victoria (5.20)."</p>
<p>“In contrast, the improvement in the financial comfort of metropolitan households reflected significant gains in all key drivers, with record high levels of comfort approached in Sydney (up 1% to 5.94), Melbourne (up 3% to 5.91) and Brisbane (up 10% to 5.82).”</p>
<p><strong>Record low mortgage rates and rising house prices improving comfort with debt in the major cities</strong></p>
<p>Across the 11 key drivers that make up ME’s Household Financial Comfort Index, the biggest improvement was with ‘comfort with debt’, up 5% to 6.55 out of 10, reaching record highs. ‘Comfort with debt’ increased 7% for households in metropolitan areas, particularly those with mortgages on their homes or on an investment property.</p>
<p>“Significantly lower home loan rates and relatively low and stable unemployment rates helped to significantly improve ‘comfort with debt’ – especially in major capital cities, while a partial reversal of the fall in residential property prices in eastern capital cities and expectations of further price gains have also eased gearing concerns,” said Oughton.</p>
<p>Mortgage stress eases further and expected debt management improves Consistent with a significant fall in home loan rates, sustained low unemployment and improved property prices in most of Australia, mortgage stress eased a bit further during the past six months.</p>
<p>Nevertheless, there remains generally high levels of mortgage stress and significant other financial stress amongst households.</p>
<p><strong>Record low Reserve Bank official interest rates helping, but divide households </strong></p>
<p>For the first time in the latest survey, ME asked households if they thought they were ‘better’ or ‘worse off’ as a result of the historically low official interest rates.</p>
<p>Overall, slightly more households reported being better off (27%), compared to worse off (23%), while the remaining half of households reported they weren’t impacted positively or negatively.</p>
<p>“Those households paying off a mortgage felt they were far better off than those renting or who already own their homes. When it came to investors with debt, results show they feel they’ve benefitted the most (60% ‘better off’) from the flow on to record low mortgage rates – an indication of the high level of gearing among residential property investors in Australia.”</p>
<p>In terms of life stage, young singles and couples with no children appeared to be the biggest winners, with over half (51%) saying they were ‘better off’, followed by couples with young children (41%).</p>
<p><strong>Property price optimism revised higher</strong></p>
<p>The report revealed household optimism regarding the outlook for residential property prices has continued, with both owner occupiers (47%) and investors (51%) revising up price expectations for 2020.</p>
<p>Brisbane investors and owner occupiers were the most optimistic about higher property prices (67% and 61%, respectively), followed by Melbourne owner occupiers (55%) and Sydney investors (51%). Owner occupiers in Perth (29%) remain the least optimistic in this regard.  </p>
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j.ballantyne1990-6AQqhLzZaK

Household financial comfort fell across regional Australia: ME Bank

<html><body>
<p>GUEST OBSERVATION</p>
<p>The latest data from the Australian Bureau of Statistics confirms household wealth has fallen, on the back of falling house prices, in the past year.</p>
<p>But it’s not all bad news. There are signs of hope in the portents for the next six months.</p>
<p>During the first quarter of this year, the net worth of all Australian households rose 0.2% to A$10.2 trillion. Total household net worth in March 2019 was 0.7% lower than in March 2018, largely because of steep falls over the final six months of 2018.</p>
<p>The per capita annual decline was larger, falling by about 2.4%, because of population growth. This means the average wealth of Australians dropped by about A$9,500, from A$414,400 to A$404,900.</p>
<p><a href="https://images.theconversation.com/files/281542/original/file-20190627-76734-mgok7i.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/281542/original/file-20190627-76734-mgok7i.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a></p>
<p><em><span class="attribution"><span class="source">(Source: ABS)</span></span></em></p>
<p>This household “balance sheet event” – defined as an annual decline in household sector net wealth – is the third in the past 30 years. The other two were through the Global Financial Crisis of 2008 and immediately after.</p>
<p>Housing (land and dwellings) comprises 52% of household-sector assets. Superannuation comprises 24%. Property values fluctuate with real estate prices, while superannuation is highly exposed to volatility within the financial markets.</p>
<p><strong>Consumer spending</strong></p>
<p>The next chart highlights the relationship between changes in household net worth and spending on discretionary items and durable goods.</p>
<p><a href="https://images.theconversation.com/files/281543/original/file-20190627-76705-1x1u3cv.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/281543/original/file-20190627-76705-1x1u3cv.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a> </p>
<p><em><span class="attribution"><span class="source">(Source: ABS)</span></span></em></p>
<p>But what is interesting is that consumer sentiment has not been significantly affected.</p>
<p>The following chart shows household net worth vs Westpac’s consumer sentiment data. This is the first major downturn in household net wealth in 30 years that has not coincided with weaker consumer sentiment.</p>
<p><a href="https://images.theconversation.com/files/281544/original/file-20190627-76743-j7e3bv.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/281544/original/file-20190627-76743-j7e3bv.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a></p>
<p><em><span class="attribution"><span class="source">(Source: ABS &amp; Westpac)</span></span></em></p>
<p>It’s hard to know for certain why consumer confidence has remained relatively steady, but two things stand out.</p>
<p>First, the consumer financial adjustment has been orderly and deliberate as opposed to rapid and forced. It appears people have consciously adjusted spending and savings patterns to achieve long-term savings goals.</p>
<p>Second, there has been ongoing strength in the labour market. Despite falling wealth, people still have jobs and this reinforces confidence.</p>
<p><strong>Shares and housing stocks</strong></p>
<p>It is safe to say consumers will start spending more once they feel their asset position has stabilised.</p>
<p>Strong equity markets have played a big role in shoring up household wealth since the start of this year. As the next chart demonstrates, they could continue to do so over the period ahead.</p>
<p><a href="https://images.theconversation.com/files/281545/original/file-20190627-76701-g5i77p.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/281545/original/file-20190627-76701-g5i77p.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a></p>
<p><em><span class="attribution"><span class="source">(Source: ABS &amp; Bloomberg)</span></span></em></p>
<p>But the big swing factor is house prices – specifically land values. The Reserve Bank’s interest rate cuts should help stabilise house prices over the second half of 2019.</p>
<p>Our last chart suggests this appears to have started, with auction clearance rates improving in recent months.</p>
<p><a href="https://images.theconversation.com/files/281548/original/file-20190627-76722-ruuein.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/281548/original/file-20190627-76722-ruuein.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a></p>
<p><em><span class="attribution"><span class="source">(Source: ABS &amp; CoreLogic &amp; Bloomberg)</span></span></em></p>
<p>This all suggests household wealth could start growing again in the second half of the year. That should go a long way to stabilising the economy.<img src="https://counter.theconversation.com/content/119001/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;"></p>
<p><em><strong>Warren Hogan</strong>, Industry Professor, University of Technology Sydney.</em></p>
<p><em>This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/australian-household-wealth-has-taken-its-biggest-dive-since-the-gfc-but-things-are-looking-up-119001" target="_blank">original article</a>.</em></p>
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Australian household wealth has taken its biggest dive since the GFC, but things are looking up: Warren Hogan

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<p class="article-details">EXPERT OBSERVER</p>
<p class="article-details">Westpac expects falling house prices to see a significant ‘wealth effect’ drag on Australian consumer demand this year and next. However, the exact nature and size of this effect remains a major area of uncertainty. What does the latest evidence show?</p>
<div>
<p>For a start, the housing correction is starting to have a clearer impact on the household balance sheet. Latest data shows the total value of dwelling assets fell $270bn over 2018, reflecting both lower prices and slower additions to the dwelling stock. The decline amounts to 40% of a year’s income. Relative to income that is about half the size of the peak to trough falls seen in the GFC and 2011-12 correction.</p>
<p>Recall that the ‘signature’ of a wealth effect drag is a fall in net worth accompanied by a rise in the savings rate, the latter meaning that spending is growing at a slower pace than incomes. Also recall that the shock effect should be confined to states experiencing material price declines (NSW, Victoria and WA).</p>
<p>Westpac compiles estimates of household net worth and savings rates by state based on a range of annual and quarterly benchmarks. These ‘indicative’ estimates show, as expected, considerably larger falls in net worth in NSW and Vic with declines closer to 60% of annual income. They also highlight the extent of the prior run up with net worth in both states still well above 2015 levels.</p>
<p>On savings, the estimates point to declines in NSW and Vic consistent with a wealth effect boost to spending rather than a drag. Any hint of a turn in Q1 will be a key pointer to how this effect may play out.</p>
<p>However even before that there are some clues of a shift coming through in the composition of spending. In a detailed article on wealth effects in its March Bulletin, the RBA set out empirical estimates of the size of this effect noting that the effect appeared to be more pronounced for particular spending categories: namely, vehicles, durables and other discretionary items. A composite measure of growth in ‘wealth sensitive’ items already shows a swing to outright declines in per capita spending. While the weakness still looks to be fairly mild to date it is more pronounced in NSW, Vic and WA.</p>
<p><em><strong>MATTHEW HASSAN</strong> is a Senior Economist for Westpac</em></p>
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The wealth effects, the latest evidence: Westpac's Matthew Hassan

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<p>EXPERT OBSERVER</p>
<p>Falling property values dragging household wealth lower backed up by data from the Australian Bureau of Statistics (ABS) showed that overall household wealth fell over the final two quarters of 2018.</p>
<p>Total household assets were recorded at a value of $12.6 trillion at the end of 2018, while total household assets fell in value over both the September and December 2018 quarters taking household wealth -1.6% lower relative to June 2018.</p>
<p><img src="https://www.urban.com.au/images/2019/4/4/CL%20PP%20Values%201.JPG" alt=""></p>
<p>While the value of household assets fell by -1.6% over the past two quarters, liabilities have increased by 1.5% over the same period to reach $2.4 trillion.</p>
<p>As a result, net household worth was recorded at $10.2 trillion; the lowest it has been since September 2017.</p>
<p>Based on the data from the ABS, the Reserve Bank (RBA) then calculates a number of household finance ratios.</p>
<p>The first metric detailed from the RBA are the ratios of household and housing debt to disposable income.</p>
<p>As at December 2018, household debt was 189.6% of disposable income, a record high and up from 188.7% the previous quarter.</p>
<p>Housing debt was also a record high 140.2% of disposable income and had risen from 139.5% the previous quarter.</p>
<p>While debt levels are quite high, the ratios of asset value to disposable income are much higher.</p>
<p>While that may be the case, it is important to understand that if asset values fall, the value of the debt typically doesn’t reduce at the same speed, which can lead to asset value erosion.</p>
<p><img src="https://www.urban.com.au/images/2019/4/4/CL%20PP%20Values%202.JPG" alt=""></p>
<p>As at December 2018, household assets were 927.9% of disposable incomes.</p>
<p>This ratio has declined as property values have fallen, down from a peak of 962.1% in December 2017.</p>
<p>Similarly, the ratio of housing assets to disposable income is currently 495.3%, down from its peak of 529.7% in December 2017. The 495.3% figure is the lowest it has been since September 2016.</p>
<p>However because of a reduction in the ratio of assets to disposable income, the ratio of debt to assets is climbing.</p>
<p>Total household debt is now 20.4% of household assets, the highest it has been since March 2016.</p>
<p>Total housing debt is 28.3% of total housing assets, the highest it has been since September 2014.</p>
<p>Again, this reflects the fact that asset values are falling as debt increases.</p>
<p><img src="https://www.urban.com.au/images/2019/4/4/CL%20PP%20Values%203.JPG" alt=""></p>
<p>Despite generational low official interest rates, the measures of interest payments to disposable income have risen over recent quarters and likely reflective of lenders lifting interest rates independently of any adjustment to the cash rate by the RBA.</p>
<p>Household interest payments represented 9.1% of household disposable income in December 2018, their highest share since September 2013.</p>
<p>Housing interest payments accounted for 7.6% of household disposable income in December 2018, their highest share since March 2013.</p>
<p>Despite the cash rate tracking at generational lows, households are paying a proportionally higher share of interest than they have in many years.</p>
<p>With housing values falling and expected to keep falling the ratio of assets to disposable incomes is likely to fall over the coming quarters.</p>
<p><img src="https://www.urban.com.au/images/2019/4/4/CL%20PP%20Values%204.JPG" alt=""></p>
<p>Although most households will likely remain in a position whereby the value of their assets is significantly higher than their debt, no doubt an increasing number of recent property purchasers will have higher levels of debt than the value of their asset.</p>
<p>This is probably an area of most concern for the RBA. If this leads to reduced consumer expenditure an in-turn slower economic growth, it may be a trigger for either lower official interest rates or changes to mortgage lending policies (or both).</p>
<p>Furthermore, with household debt at record highs and households dedicating more of their income to servicing their debt at a time when interest rates are so low, and if household debt levels haven’t declined by the time interest rates rise, it could create more challenges for households.</p>
<p>In closing, the ABS/RBA data releases will be very important to focus on over the coming quarters.</p>
<p><em>CAMERON KUSHER is a Research Analyst for CoreLogic</em></p>
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Falling property values drags household wealth lower: Cameron Kusher

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<div>EXPERT OBSERVER</div>
<div> </div>
<div>Total household wealth (net worth) fell for the first time in two years, down just 0.4 per cent to $10,222.8 billion at the end of March 2018. In per capita terms, wealth eased from a record $414,277 to $410,708 in the March quarter.</div>
<div> </div>
<div>Foreigners held $557.4 billion of Aussie shares in the March quarter, down from $582.5 billion in the December quarter.</div>
<div> </div>
<div>
<div><strong>What does it all mean?</strong></div>
<div> </div>
<div>The Finance &amp; Wealth publication from the Bureau of Statistics contains the most complete figures on household finances. And for the first time in two years wealth eased slightly. This hardly comes as a surprise – home prices eased in the quarter and the losses weren’t made up elsewhere, such as on the sharemarket.</div>
<div> </div>
<div>On average, each Australian has net assets (assets less liabilities) of just over $410,000, a total that has lifted by over $9,000 in the past year. And over the past five years per capita wealth has lifted by more than $100,000 or 36 per cent. It is clear that household balance sheets remain solid.</div>
<div> </div>
<div><img src="https://www.urban.com.au/images/2018/6/29/CJ%20Graph.JPG" alt=""></div>
<div> </div>
<div>Looking ahead home prices are likely to ease further from record levels. The $64 question is whether gains on the sharemarket will offset the reduced valuations of Australian homes. Per capita wealth may consolidate near $400,000 after tremendous gains over the past five years.</div>
</div>
<div>
<div> </div>
<div>Total household wealth (net worth) fell for the first time in two years, down just 0.4 per cent to $10,222.8 billion at the end of March 2018. In per capita terms, wealth eased from a record $414,277 to $410,708 in the March quarter. Wealth is still up $9,072.70 or 2.3 per cent over the year.</div>
<div> </div>
<div><img src="https://www.urban.com.au/images/2018/6/29/CJ%20Graph%204.JPG" alt=""></div>
<div> </div>
<div>The ABS noted, “Household liabilities outgrew assets during March quarter 2018, resulting in a decrease of 0.4 per cent in household net worth, falling from a 2.0 per cent rise last quarter. Household liabilities was the largest contributor to the decrease in household net worth, detracting 0.3 percentage points, followed by land and dwellings assets detracting 0.2 percentage points.</div>
<div> </div>
<div>Households held a record $1,105.7 billion in cash and deposits at the end of March. Cash and deposit holdings represented 21.65 per cent of financial assets, down from 21.71 per cent in the December quarter but still just above the post global financial crisis (GFC) average of 21.16 per cent and the long-term average of 16.3 per cent.</div>
<div> </div>
<div>Households held a record $939.3 billion in shares or 18.6 per cent of all financial assets, in line with the average since the global financial crisis.</div>
<div> </div>
<div><img src="https://www.urban.com.au/images/2018/6/29/CJ%20Graph%208.JPG" alt=""></div>
<div> </div>
<div>Pension fund (superannuation fund) assets fell by $9.9 billion to $2,174.5 billion in the March quarter. Cash and deposits stood at 11.3 per cent of financial assets, below the 13.5 per cent average since the global financial crisis, but above the long-term average of 9.4 per cent.</div>
<div> </div>
<div>Foreigners held $557.4 billion of Aussie shares in the March quarter, down from $582.5 billion in the December quarter. Foreigners held 30.5 per cent of total listed shares (long-term average 32.9 per cent).</div>
<div> </div>
<div><img src="https://www.urban.com.au/images/2018/6/29/CJ%20Graph%205.JPG" alt=""></div>
<div> </div>
<div>
<div><strong>What is the importance of the economic data?</strong></div>
<div><strong> </strong></div>
<div>The Australian Bureau of Statistics releases the Financial Accounts publication each quarter. The data covers assets, liabilities and financial flows for the key sectors of the economy. Figures on financial wealth help reveal the true state of household finances.</div>
<div> </div>
<div><img src="https://www.urban.com.au/images/2018/6/29/CJ%20Graph%207.JPG" alt=""></div>
<div> </div>
<div>
<div><strong>What are the implications for interest rates and investors?</strong></div>
<div><strong> </strong></div>
<div>With wages tracking closely in line with prices and wealth now easing, there will be continued uncertainty about future spending by Australian families. In other words, just another reason to leave cash rates on hold.</div>
<div> </div>
<div>
<div>CommSec expects official rates to remain stable until early 2019.</div>
<p><em>Craig James is chief economist at CommSec.</em></p>
</div>
</div>
</div>
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Household wealth now falling: Commsec's Craig James

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<h1>Three charts on: the great Australian wealth gap</h1>
<p>Young Australians still remain locked out of the housing market as the wealth disparity grows across generations. <span><a href="https://theconversation.com/profiles/trent-wiltshire-316914"><br></a></span></p>
<p>It’s a tale of two Australias: older Australians are getting much wealthier, and the young are being left behind.</p>
<p>It’s a story only too familiar to Australians under 45 who have struggled to save enough money to access the housing market in Australian cities. They are a generation for whom the great Australian dream of home ownership has become largely elusive.</p>
<p><a href="https://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/6523.0Main+Features12015-16?OpenDocument" target="_blank">Data</a> from the Australian Bureau of Statistics (ABS) shows that older Australians are capturing an increasing share of the nation’s wealth, and the house-price boom is a major cause of the growing divide between the generations.</p>
<p>As you can see in the following chart, households headed by 65-74-year-olds were on average A$480,000 wealthier in 2015-16 than households in the same age group 12 years ago. And that’s after taking inflation into account and despite the damage caused by the global financial crisis. Households headed by 45-54-year-olds are A$400,000 richer.</p>
<p>In contrast, households headed by 35-44-year-olds are on average only A$120,000 wealthier – and for 25-34-year-olds the figure is just A$40,000.</p>
<p><iframe style="border: none;" src="https://datawrapper.dwcdn.net/A0XEq/3/" frameborder="0" width="100%" height="400"></iframe></p>
<h2>Property is a key factor for wealth disparity</h2>
<p>Soaring property prices are a major factor behind the rapidly growing wealth of older Australians. According to the <a href="https://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/6416.0Main+Features1Jun%202017?OpenDocument">ABS</a>, house prices grew by 37% on average across all the capital cities between 2003-04 and 2015-16 (and by more than 50% in Melbourne alone). The boom was not limited to the capitals; prices also grew strongly in <a href="https://www.corelogic.com.au/reports/CL_Housing-Affordability-Dec_2016.pdf">regional areas</a>.</p>
<p>The next chart shows that for households headed by someone aged 75 or over, greater property wealth contributed about three-quarters of the increase in their total net wealth. For households headed by 65-74-year-olds and 55-64-year-olds, property contributed about half of the total increase in wealth.</p>
<p>But for younger Australians, again it is a different story.</p>
<p>Bigger mortgages largely offset the increase in property wealth for households headed by 25-34-year-olds and 35-44-year-olds. Baby Boomers have also used the superannuation system to build their wealth. They took advantage of the <a href="https://grattan.edu.au/wp-content/uploads/2015/11/832-Super-tax-targeting.pdf" target="_blank">generous super tax breaks</a> on offer for people nearing retirement, such as the ability to put large, concessionally taxed sums into their super funds just before retirement.</p>
<p>Average superannuation wealth over the same 12-year period increased by A$230,000 in real terms for households headed by 65-74-year-olds, and by more than A$150,000 for households headed by 55-64-year-olds. Strong <a href="https://au.investing.com/indices/s-p-asx-200-net-total-return-historical-data" target="_blank">share market returns</a> have further boosted superannuation balances and other financial wealth.</p>
<p><iframe style="border: none;" src="https://datawrapper.dwcdn.net/OX09s/6/" frameborder="0" width="100%" height="400"></iframe></p>
<h2>Young people locked out</h2>
<p>As property prices have boomed, more young Australians have been locked out of home ownership.</p>
<p>As this last chart shows, home ownership rates among households headed by 25-34-year-olds fell between 1981 and 2016, from more than 60% to 45%. For households headed by 35-44-year-olds the fall was from 75% to around 62%. Home ownership rates are also falling for households headed by 45-54-year-olds.</p>
<p>Some of these falls are also partly the result of social changes: Australians are waiting until later in life before starting work, forming long-term partnerships, and having children. But most Australians still <em>want</em> to own a home, so it is reasonable to conclude that higher property prices are the <a href="https://www.rba.gov.au/publications/rdp/2017/2017-05" target="_blank">biggest cause</a> of lower ownership rates.</p>
<p>Two-thirds of 25-34-year-olds responding to a 2017 <a href="https://politicsir.cass.anu.edu.au/sites/politicsir.anu.edu.au/files/ANUpoll-24-Housing-2017.pdf" target="_blank">Australian National University survey</a> thought owning a home was an important “part of the Australian way of life”, and more than half were “very concerned” that younger generations won’t be able to afford a house.</p>
<p><iframe style="border: none;" src="https://datawrapper.dwcdn.net/lOpWw/6/" frameborder="0" width="100%" height="400"></iframe></p>
<h2>The bank of mum and dad</h2>
<p>The wealth divide between generations can easily lead to a more profound divide within generations. For many younger people, the only way that they can afford to buy a house is with help from “the bank of mum and dad”.</p>
<p>As house prices have increased, <a href="https://www.rba.gov.au/speeches/2017/sp-ag-2017-02-16" target="_blank">more first home buyers are receiving assistance</a> from family and friends to enter the property market. The strong growth in the wealth of today’s older generations, combined with the steady shrinking of the family size from 1960 to 2000, will lead to more and larger inheritances.</p>
<p>Inheritances tend to transmit wealth to children who are <a href="https://grattan.edu.au/report/the-wealth-of-generations/" target="_blank">already well-off</a>, and home ownership is more likely among those who receive an inheritance, and more likely still among those who receive larger inheritances.</p>
<p><img src="https://counter.theconversation.com/content/84515/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">Australia is becoming wealthier, but much of the increase is concentrated in the hands of older generations. The trend is unmistakable: unless something changes, the young will fall further behind and inequality will get worse.</p>
<p><span><a href="https://theconversation.com/profiles/trent-wiltshire-316914" target="_blank">Trent Wiltshire</a>, Associate, <em><a href="https://theconversation.com/institutions/grattan-institute-1168" target="_blank">Grattan Institute</a></em> and <a href="https://theconversation.com/profiles/danielle-wood-147710" target="_blank">Danielle Wood</a>, Fellow, Australian Perspectives, <em><a href="https://theconversation.com/institutions/grattan-institute-1168" target="_blank">Grattan Institute</a></em></span></p>
<p>This article was originally published on <a href="https://theconversation.com" target="_blank">The Conversation</a>. Read the <a href="https://theconversation.com/three-charts-on-the-great-australian-wealth-gap-84515" target="_blank">original article</a>.</p>
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The great Australian wealth gap

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<div class="section">
<div class="layoutArea">
<div class="column">GUEST OBSERVER</div>
<div class="column"> </div>
<div class="column">Total household wealth (net worth) stood at a record $9,404.5 billion at the end of December 2016, up $328.1 billion or 3.5 percent over the quarter – marking the largest quarterly increase in net wealth in seven years.</div>
<div class="column"> </div>
<div class="column">In per capita terms. CommSec estimates that wealth rose to a record $386,972 in the December quarter, up $12,227 over the quarter and up around $24,000 over the year.</div>
<div class="column">
<br>Households held a record $1,046 billion in cash and deposits at the end of December. Cash and deposit holdings represented 22.4 per cent of financial assets. A record $798.2 billion was held in shares.</div>
<div class="column">
<br>Foreigners held a record $792.2 billion of Aussie shares in the December quarter or 45.1 per cent of the total.</div>
<div class="column">
<br>Job vacancies: Job vacancies rose by 1.8 per cent to 185,600 in the three months to February – a 6-year high. Job vacancies are up 7.3 per cent on a year ago.</div>
<div class="column"> </div>
<div class="column">New home sales: New home sales rose by 0.2 per cent in February. </div>
<div class="column"> </div>
<div class="column"><a href="https://www.propertyobserver.com.au/images/2017/03/31/Screen%20Shot%202017-03-31%20at%208.24.38%20AM.png" target="_blank">Click to enlarge</a></div>
<div class="column"><img src="https://www.urban.com.au/images/2017/03/31/Screen%20Shot%202017-03-31%20at%208.24.38%20AM.png" alt=""></div>
<div class="column"> </div>
<div class="column">What does it all mean?</div>
<div class="column">
<div class="page" title="Page 1">
<div class="section">
<div class="layoutArea">
<div class="column"> </div>
<div class="column">Bad news for the gloom &amp; doomsters – new data confirms that Australians have never been wealthier. While loans rose by 1.6 per cent in the December quarter, yet again this was exceeded by growth of financial assets. And on top of this, the value of homes soared by 4.5 per cent.</div>
<div class="column"> </div>
<div class="column">In simple terms, debt may be up, but it is being used to purchase assets that are growing at a faster rate – not just homes but shares and other financial assets. Over the past two years financial assets have grown by $652 billion, well ahead of the $246 billion lift in loans. It is a point worth stressing to put more reason into the debate on household debt.</div>
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<br>But conservatism still reigns. The proportion of all financial assets in the economy held in cash and bank deposits has lifted to a 4-year high. In the December quarter over a fifth of all financial assets – 21.4 per cent – was held in cash and bank deposits. Aussie consumers, businesses and pension funds are all holding more than the “normal” proportion of financial assets in cash – especially companies and super funds.
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<div class="column">Foreign investors are still quite happy to hold Aussie shares. In fact foreigners now hold a record $765.6 billion of listed shares or just over 45 per cent of the total. In short, no worries about our economy from abroad.</div>
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<div class="column">The number of job vacancies has surged in the nine months to February and vacancies are now holding near 6-year highs. With more optimism on the global economy, business is shifting its focus to growth, investment and profitability. The lift in job vacancies certainly bodes well for hiring in coming months. Overall it is pretty clear that the job market remains in good shape.</div>
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<div class="column">Last year most of the jobs created were in part-time roles, with employers hiring more part timers and managing their workforce more carefully. The result was understandable given the degree of uncertainty that was prevalent with the Federal Budget, timing of an early election, and Brexit. However throughout the latter part of the year, employers started to add more full-timers. Stronger profitability and a focus on growth should give employers a degree of comfort to add full-time and permanent staff to the roster over 2017.<br><p><a href="https://www.propertyobserver.com.au/images/2017/03/31/Screen%20Shot%202017-03-31%20at%208.25.50%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/03/31/Screen%20Shot%202017-03-31%20at%208.25.50%20AM.png" alt=""></p>
<p>Interestingly there are around 13,000 more vacancies than at the same time in 2016. The jobs being created are primarily in the services sector, with healthcare and admin roles leading the gains. These jobs tend to be spread over a raft of small and medium-sized businesses as well as large firms, so generally don’t attract the same degree of media attention as jobs lost in mining. Importantly the lift in commodity prices should support the resources sector. In fact the latest figures suggest that the number of jobs across the mining sector has bottomed and now lifting – albeit incrementally.</p>
<p>What do the figures show?</p>
<p>Financial Accounts:</p>
Total household wealth (net worth) stood at a record $9,404.5 billion at the end of December 2016, up $328.1 billion or 3.5 per cent over the quarter – marking the largest quarterly increase in net wealth in seven years. In per capita terms. CommSec estimates that wealth rose to a record $386,972 in the December quarter, up $12,227 over the quarter.</div>
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<br>In real terms, the value of land and dwellings rose by $217 billion in the December quarter, while the value of financial assets rose by $29.3 billion. Net saving plus real wealth rose by $274.5 billion in the quarter.</div>
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<br>Household financial liabilities fell by $8.6 billion in the December quarter in real terms.</div>
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<div class="column">Households held a record $1,046 billion in cash and deposits at the end of December. Cash and deposit holdings represented 22.4 per cent of financial assets, up from 22.3 per cent in the September quarter and in line with the long-term average of 22.2 per cent.</div>
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<div class="column">Households held a record $798.2 billion in shares or 18.5 per cent of all financial assets, and above the 17.7 per cent average since the global financial crisis.</div>
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<div class="column">Pension fund (superannuation fund) assets rose by $52.7 billion to $2,013.1 billion in the December quarter. Cash and deposits stood at 14.8 per cent of financial assets, in line with the 14.8 per cent average since the global financial crisis but well above the long-term average of 9.7 per cent.</div>
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<p><span></span><span>Foreigners held a record $792.2 billion of Aussie shares </span><span>in the December quarter or 45.1 per cent of the total (long-term average 42.7 per cent). Share of bond holdings by foreigners rose from a 14-year low of 47.7 per cent in the September quarter to 47.8 per cent in the December quarter.</span></p>
<p><a href="https://www.propertyobserver.com.au/images/2017/03/31/Screen%20Shot%202017-03-31%20at%208.27.00%20AM.png" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="https://www.urban.com.au/images/2017/03/31/Screen%20Shot%202017-03-31%20at%208.27.00%20AM.png" alt=""></span></p>
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<p><span>Job vacancies: </span></p>
Job vacancies rose by 1.8 per cent to 185,600 in the three months to February – a near 6-year high. Job vacancies are up 7.3 per cent on a year ago.</div>
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<div class="column">In original terms, annual changes in vacancies across states and territories were: NSW (down 0.7 per cent); Victoria (up 10.5 per cent); Queensland (down 12.2 per cent); South Australia (down 2.3 per cent); Western Australia (up 0.7 per cent); Tasmania (up 32.9 per cent); Northern Territory (up 7.3 per cent) and ACT (up 5.9 per cent).<br><p>Vacancies rose 13,100 in original terms over the year. In terms of industries, vacancies rose the most over the year in Health Care &amp; Social Assistance (up 4,700), Other Services (up 3,000), Administrative &amp; Support services (up 2,900) and Professional, Scientific and Technical Services (up 1,900). Vacancies fell most in Retail trade (down 3,300), Accommodation &amp; Food services (down 1,400), and Rental, Hiring and Real Estate Services (down 800).</p>
<p>New home sales</p>
In seasonally-adjusted terms, new home sales rose by just 0.2 per cent in February. The number of detached house sales fell by 0.1 per cent while multi-unit dwelling sales lifted by 1 per cent.<br><p>The Housing Industry Association reported: “Detached house sales increased in two out of five mainland states in February 2017 - Western Australia and Victoria. Detached house sales in WA increased by 11.3 per cent in February 2017 following a rise of 12.1 per cent in January. Note that these rates of growth are exaggerated by the extremely low base for detached house sales. Detached house sales in Victoria posted a monthly gain of 5.1 per cent in February. Elsewhere for the mainland states, in February detached house sales fell by 12.6 per cent in New South Wales and were down by 5.7 per cent in Queensland and 0.2 per cent in South Australia.”</p>
<p>What is the importance of the economic data?</p>
The Australian Bureau of Statistics releases the Financial Accounts publication each quarter. The data covers assets, liabilities and financial flows for the key sectors of the economy. Figures on financial wealth help reveal the true state of household finances.</div>
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<br>The Australian Bureau of Statistics releases Job Vacancies data each quarter. The data is useful in gauging the strength of the job market.</div>
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<br>The Housing Industry Association releases data on the sales of new homes each month. The HIA collects the data each month from a sample of Australia's largest 100 home builders. The survey covers around 14 per cent of the home building industry. </div>
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<div class="column"><a href="https://www.propertyobserver.com.au/images/2017/03/31/Screen%20Shot%202017-03-31%20at%208.28.05%20AM.png" target="_blank">Click to enlarge</a></div>
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<p><span>What are the implications for interest rates and investors? </span></p>
Record household wealth will continue to support spending. And it is clear that household balance sheets remain in very good shape. While the gloomsters focus on higher household debt, the simple fact is that money is being used to buy assets, assets that are providing better returns than the cost of the loans being taken out. Aussies aren’t borrowing in droves to buy luxury cars – although some indeed are. No, the majority are investing in shares, putting money to work in superannuation and investing in property.</div>
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<br>There is always a risk that asset values can fall as well as rise. But Aussies are well placed to deal with that situation should it eventuate.</div>
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<br>A number of retailers have noted that the ‘wealth effect’ has been positive for their sales – areas like furniture, cars, boats and electrical equipment. </div>
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<div class="column"><em>Savanth Sebastian is an economist for <a href="https://www.commsec.com.au/" target="_blank">CommSec</a></em></div>
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Job vacancies at 6-year highs: Savanth Sebastian

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<p><img src="https://counter.theconversation.edu.au/content/64297/count.gif" alt="The Conversation" width="1" height="1"></p>
<p>GUEST OBSERVER</p>
<p>There is little justification in giving rich households generous superannuation tax concessions, as wealth has a limited impact on spending and wellbeing in retirement new research suggests.</p>
<p>Retirement income is at the core of the controversy around the federal government’s proposed changes to superannuation and yet very little is known about how retirees actually spend their money.</p>
<p>Our research found that, despite the large variation in the income levels of households, wealthier households spend at a similar level to those with more modest wealth.</p>
<p>Retiree couples aged 65-74 spent just $33,200 a year on average, while single households of the same age spent an average of only $18,400 in 2014.</p>
<p>These figures fall below the benchmarks set by the Association of Superannuation Funds of Australia (ASFA), which suggests a couple needs $33,784 a year to afford a “modest” lifestyle, and 20 percent lower than the $23,489 figure it benchmarked for single households in 2014.</p>
<p>In March, the federal government adopted the thinking from the Financial Systems Inquiry that superannuation’s objective was to provide income in retirement to substitute or supplement the Age Pension. But Treasurer Scott Morrison remains under pressure not to go through with plans to limit lifetime non-concessional superannuation contributions to $500,000.</p>
<p>The government appears committed to other super reforms aimed at dismantling super concessions for the wealthy, announced in its May budget.</p>
<p>At present retirement income needs are estimated either as a proportion of income during the working life or by using income “standards” (such as those used by ASFA) which estimate the income needed to attain a given quality of life.</p>
<p>Our analysis, using data from the most recent Household, Income and Labour Dynamics in Australia (HILDA) survey, shows spending levels are largely driven by cost-of-living pressures such as geographical location (with spending highest in Sydney and lowest in regional South Australia). Household structure and home ownership are also important.</p>
<p>It’s likely that the wealthiest households are indeed “saving” – either deliberately to ensure they can pass on their wealth to the next generation, or to self-insure against possible future aged-care and health expenses – particularly if they own their home outright.</p>
<p>In comparison, retirees who are in the rental market spent on average $11,500 on rent – almost 40 percent of their total annual expenditure. This points to a need for a real focus on the plight of retirees exposed to the rental market, particularly single-person households.</p>
<p>With a large bulk of their spending swallowed up by rent, these households appear to struggle to afford basic household items. Our analysis showed households that rely on the Age Pension as their major source of income had much lower relative spending on health care and insurance – $1,900 annually, compared to $4,300 for self-funded retirees.</p>
<p>Single-person households also struggled, with almost 80 percent of households unable to reach even a modest standard of living.</p>
<p>For these households, increases in welfare payments or housing assistance will likely have a greater impact on well-being than raising the current 9.5 percent Superannuation Guarantee to 12 percent.</p>
<p>On the positive side, we found that superannuation already provides a valuable source of income for younger retirees – around one-fifth of annual income for those aged 65-74. Superannuation wealth has grown enormously over the past decade. In 2014, households aged 65-74 had superannuation assets 190 percent higher (in real terms) than their counterparts in 2002.</p>
<p>And this huge growth in superannuation and household wealth has coincided with increases in household spending, with current retirees spending more than previous cohorts.</p>
<p>Further growth of the superannuation system through greater participation and the rising Superannuation Guarantee will likely see the wealth of retirees continue to grow. But until there is a clearer picture of superannuation wealth and retirement income, it will be hard to ensure superannuation reforms deliver on their objective.</p>
<p><em><span class="fn author-name">Eliana Maddock is r</span>esearch officer, Australian Centre for Financial Studies and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/eliana-maddock-293619" target="_blank">here</a>.</em></p>
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