Australia's facing biggest property wealth drop in 7 years

Australia's slumping property and stock markets have driven the biggest decline in household wealth in seven years, underscoring pressure on the central bank to resume cutting interest rates. Household wealth decreased 2.1 per cent in the final three months of last year, the largest drop since the third quarter of 2011, the statistics bureau said in Sydney Thursday. The decline was driven by land and property values, which slid for a fourth straight quarter, and financial assets as pension funds were hit by stock market losses. Australia is seeing a reversal of its traditional wealth generation method of gearing up to the limit to buy a house and then inflating away debt with wage rises and property gains. Instead, asset deflation is pushing up debt ratios: despite restricted lending, mortgage debt as a share of residential land and dwellings climbed to 28.3 per cent, a four-year high.