PHOTO: For Sale signs outside a unit block in Sydney, 28 October 2020. Photograph: Dan Himbrechts/AAP
The Ardern government is taking on speculators and investors. But there seems little chance of such changes here
Forget the recession, forget the lockdowns, the pandemic, the zoom meetings and the kids doing school from home: 2020 was a great year! In 2020, Australian households got richer.
If you owned property, that is.
In 2020, despite employment crashing, Australian households ended the year with a total extra net worth of $790bn – a 7% increase on the level we all held at the end of 2019.
That doesn’t mean 2020 was all smooth sailing – the first quarter was a horror show: household net worth fell by $255bn in just three months.
But not to worry, so big was the rebound that in the last three month of the year household wealth increased $501bn, or around 95% of the amount of Australia’s total GDP for that quarter.
The big reason was house prices, or more specifically – land.
In the last half of 2020, residential dwelling and land asset values rose 6.5%, but most of that was land prices, which rose over 8%, compared with dwelling values that increased just 1%.
As much as you might love your house, the part of your residence that most increases in value over time is the land upon which it rests.
The other big rise in the second half of the year was superannuation. While the plunging share price in the first part of the year saw Australian superannuation balances fall by a total of $274bn, over the following nine months it rebounded by $368bn.
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