Australia officially a nation of millionaires but pay on hold Household income stall

AUSTRALIA is officially a nation of millionaires — but we haven’t had a decent pay rise in a decade.

The nation’s average household wealth has passed the $1 million mark for the first time ever thanks to long-term growth in property prices and superannuation balances.

The findings are part of the Australian Bureau of Statistics’ survey of income and housing which stands as the nation’s largest study on income and wealth. The survey, conducted every two year, was released yesterday. Average household wealth stood at $1.02 million for the 2017-18 financial year, up 37 per cent from $749,000 in 2005-06.

Household wealth is the value of all the assets owned by a household, such as their home and super balances, less the value of all of its liabilities, such as their mortgage and credit card debt.

ABS chief economist Bruce Hockman said recent rises in superannuation balances and long-term growth in house prices had pushed the average figure to a new record high.

“While ABS data has shown that there is a recent downturn in the property market, over the longer term there has been sustained growth,” he said.

The top end of town has benefited the most from the nation’s housing boom while the poorest 20 per cent has missed out on any gain.

The average net worth of high wealth households — those in the top 20 per cent — has risen from $1.9 million in 2003-04 to $3.2 million in 2017-18. The average net worth of middle wealth households — those in the middle 20 per cent — has increased from $415,800 in 2003-04 $564,500 in 2017-18.

Poor households — those in the bottom 20 per cent — saw their net worth rose by $1000 to $35,200 over the same time frame. The survey also shows household income has all but stalled over the past decade.

Low wage growth has been called out as a key economic headwind by the Reserve Bank. Average weekly household income increased by a to measly $44 to $1062 in the decade to 2017-18.

In contrast, households saw their income grow by $220 to $1018 in just the four years to 2007-08, a period when the mining boom was in full swing.

“For low income households there has been an increase of $28 in average weekly household income over the past decade, while for high income households there was an increase of $57,” he said.