17/06/2015 - 06:14

Perth the city of savers

17/06/2015 - 06:14

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There are almost 70,000 millionaire households in Western Australia, according to a study to be released by Bankwest Curtin Economics Centre today.

The mining boom has dramatically increased wealth in Perth.

There are almost 70,000 millionaire households in Western Australia, according to a study to be released by Bankwest Curtin Economics Centre today.

Just more than 7 per cent of households in the state have assets and savings (excluding the family home) worth more than $1 million, compared with 7.6 per cent of households nationally.

That means that almost 700,000 households Australia-wide are above the $1 million mark.

The study also shows that Perth is leading other capital cities with the highest level of household savings, at $381,300.

That was up from $181,600 in the 2006 financial year.

The improvement in the household balance sheet has been driven by a dramatic surge in disposable income, which increased 68 per cent from $59,500 in 2005-06 to just more than $100,000 now.

Household debt rose significantly, from $112,700 to $201,000.

BCEC director Alan Duncan said that, nationally, households had been more willing to take on debt.

“Following the GFC, Australians decreased their propensity to take on debt and exhibited discipline in their expenditure at a time when the economic outlook was uncertain,” Professor Duncan said.

“The tough times associated with the GFC may have motivated households to budget with more care, but we have some concerns that those disciplines are starting to fade.”

He added that in the event of a major downturn similar to the GFC, households more heavily in debt would be exposed to more risk.

Regional WA benefited from the boom years, too, with household disposable income up 54 per cent.

However, most households outside of Perth opted not to substantially increase savings.

From around $294,000 in 2005-06, average savings in regional WA were up 14 per cent to $335,100.

Nationwide, disposable incomes were up 38 per cent, while savings and household debt were up around 50 per cent each.

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