Federal Treasury’s summer economic round up, released on Friday, showed the market value of Australian net private sector wealth – post-tax assets and cash owned by individuals – jumped 19 per cent since a year earlier, or 15 per cent after allowing for inflation.
The figures show the growth rate in private wealth during the year to June 2006 was below record growth in the year to June 2004, but was still considerably higher than the average of the past two decades.
Private wealth rose by over $150,000 since 2001 and is now almost eight times the gross domestic product of the economy.
Two-thirds of the increase is due to higher values of business assets due to record growth in Australian stock market. The ASX 200 rose by 18.6 per cent in the year to June 2006, the third consecutive year of greater than 16 per cent growth.
Property wealth grew by 6.7 per cent, contributing a third of the growth. The report noted that the contribution is much smaller than in the early years of the current decade, but has accelerated slightly since 2004 05, reflecting greater increases in house prices since the December quarter of 2005.
The Australian Bureau of Statistics House Price Index for established houses in capital cities increased by 7.0 per cent in the year to June 2006, still well below the double digit rises experienced in 2003 and 2004.
Two thirds of this increase was due to the increase in house prices in Perth, which rose by 38.1 per cent in the year to June 2006.
