What the average Australian is REALLY worth – and how the rich got richer despite soaring interest rates

The average Australian adult now has a net worth of $855,781 as aggressive rate hikes fail to stop rising house prices.

More than two-thirds of Australian household wealth is invested in residential property.

A smaller share, or a fifth, of Australia's wealth is tied into a pension, which cannot be accessed until a person turns 60.

The Reserve Bank's thirteenth interest rate hike in eighteen months has failed to slow Australians' wealth accumulation as house prices continue to rise at a time of record high immigration.

Household wealth rose 2.3 per cent or $339.4 billion to $15.305 trillion in the September quarter, the Australian Bureau of Statistics' national accounts of finance and wealth show.

Net worth is defined as a person's total assets minus their liabilities, such as a mortgage.

“The rise in net worth was driven by strength in the housing market,” the ABS said.

Because Australia has 17.885 million eligible voters, the adult wealth average was $855,781, making Australia one of the richest countries in the world.

The ABS data also showed that older people who have paid off their homes are doing better than the young and middle-aged who are struggling with rising mortgage repayments.

A record 518,100 net migrants moved to Australia in the last financial year and 429,580 migrants continued to move to Australia permanently or long-term in the year to September.

Strong population growth boosted demand for property, despite the RBA raising interest rates at the steepest pace since 1989.

During the September quarter, home loans rose by $17.5 billion, but this was the weakest home loan growth since the September quarter of 2020, when Melbourne was in lockdown and shortly before the RBA cut interest rates to a record low of 0. 1 percent.

This meant baby boomers were more likely to benefit from the growth in property capital, as younger Australians struggled to get approved for a home loan, while interest rate rises eroded the amount banks could lend to them.

“Home loan growth slowed in the September quarter as housing market activity declined, in a high interest rate environment where house prices are high and borrowing capacity remains limited,” the ABS said.

“Home loan growth was the weakest since the September 2020 quarter as loan growth for owners and investors remained subdued due to high interest rates.”

Since January, the average house price in Sydney has risen 12.5 per cent to $1.397 million, CoreLogic data shows, even as the RBA cash rate hit a 12-year high of 4.35 per cent in November.

Perth, the most affordable market in Australia's state capital, saw the average house price rise 13.9 per cent this year to $676,910.

Australian housing was worth $10.267 trillion in the September quarter, with individuals and households owning the majority of it as owner-occupiers or investors.

The Australian Bureau of Statistics said 'housing market strength' was driving the country's net worth, which now stands at more than $15.3 trillion (pictured is an auction in Sydney)

Individual investors who rent out real estate can claim negative tax benefits and a 50 percent reduction in capital gains tax upon sale.

But companies are not entitled to the same tax breaks, meaning they have no incentive to develop build-to-rent apartments.

A small portion of the residential assets would be owned by developers looking to sell units in a new complex.

Just under a quarter, or 23 percent, of the country's total wealth is made up of superannuation, with $3.5 trillion in retirement savings, according to Australian Prudential Regulation Authority data from the same period.

The ABS estimated that the pension funds, where retirees drew on their savings for everyday living, had assets of $2.983 trillion.

Average super balances were $170,000 in the 2020-21 financial year, the latest figures from the Australian Taxation Office show.

With super balances having grown since then, more than a fifth of all wealth is held in retirement savings, which cannot be touched until a person turns 60, for those born since July 1964.