Opinion Wealth boom masks big gaps between haves and have-nots
That, however, is what we got, thanks to a bonanza in housing and sharemarkets, underpinned by ultra-cheap debt and government stimulus.Credit:Average household wealth in Australia swelled by an extraordinary $341,000 between 2018 and 2021, which was as big as the increase in the previous 15 years, a new report from the Australian Council of Social Services and the UNSW Sydney Poverty and Inequality Partnership says.
For one, the COVID-19-induced boom in wealth clearly sits uncomfortably with one of the biggest long-term problems today: that many people are priced out of the housing market. You might also wonder just how evenly all the big gains in wealth have been shared over the years. The research, based on data from the Bureau of Statistics, provides an interesting snapshot of the huge boom in household wealth between 2018 and 2021 - a period dominated by the pandemic.You might remember that at first it looked like COVID-19 would cause huge amounts of wealth destruction.
No prizes for guessing the biggest cause of this surge: housing, which drove 69 per cent of the overall increase in wealth during these three years. ACOSS reports that, surprisingly, the latest surge in house prices caused a modest decline in wealth inequality. It measures inequality by dividing the population into a few groups: the richest 10 per cent; the next 30 per cent, known as the “comfortable middle”; and the lower 60 per cent of the population.
The long-term trend since early this century has been towards the wealthiest people owning a bigger share. For example, the richest 10 per cent of the population held 42 per cent of all wealth in 2003, but this had risen to 46 per cent of all wealth in 2021 .
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