Household wealth reaches above $200,000
April 2004
The first comprehensive survey of household assets, debts and
savings has been released by the Reserve Bank of Australia. The
survey is based on the Household, Income and Labour Dynamics in
Australia survey which was completed in 2002 and incorporated data
from more than 7,200 homes across the country.
The report results showed the median wealth of the average
Australian household was $218,500. The most valuable non-financial
asset of most households in the survey was their home.
According to the report, New South Wales and Queensland
households were likely to have higher levels of wealth than other
states predominately as a result of the boom in median property
prices in these states.
In New South Wales the median household wealth was $265,000 in
2002, compared to a median household wealth in Queensland of
$173,000 and a median household wealth in South Australia of
$153,100.
Household wealth was also determined by stage of life, with
households towards the end of their working life, perhaps not
surprisingly, having more savings, greater equity in their homes and
lower mortgages than younger families.
People who choose to rent also had a considerably lower net worth
than home owners, primarily because renters are generally younger in
age than home owners.
Around 17% of all households that participated in the survey
owned a residential property that wasn’t their primary place of
residence, with a median value of $200,000. Of these households,
only 10.3% received a rental income from their second property.
People who owned their own home were far more likely to own a
second property than those who rent (again, this is likely to be a
reflection of the fact that renters are generally younger than home
owners), although 10% of renters did own a second property.
The median value of second properties owned by people who also
own their own home was $200,000, compared to people who rent and own
a second property in which case the median value of the second
property was $160,000.
Around 42% of second properties owned by home owners had an
outstanding mortgage. In contrast, 70% of second properties owned by
renters had an outstanding mortgage.
Half of all home owners who took part in the survey reported they
had an outstanding mortgage on their primary place of residence. The
median value of outstanding mortgages was $90,000.
Of these outstanding mortgages, 80% were first mortgages, 2% were
loans to family or friends and the remainder were home equity loans
or lines of credit.
