Australians have the world’s fourth highest wealth thanks to a surge in property prices and the share market.
Average net wealth levels in Australia rank only behind Switzerland, Hong Kong and the US, a new report by Swiss bank Credit Suisse has revealed.
With Covid last year relatively contained in Australia, compared to other parts of the developed world, Australia experienced some of the world’s fastest wealth growth.
Last year, when it came to high net worth individuals, Australia was home to 12 billionaires and 1.42million millionaires, based on assets minus debt.
Australians have the world’s fourth highest wealth thanks to a surge in property prices and the share market. Pictured are men and women at Sydney’s Royal Randwick Racecourse
The world’s richest countries by average wealth
1. Switzerland: $US598,410 ($A793,224)
2. Hong Kong: $US518,810 ($A687,767)
3. United States: $US463,550 ($A614,447)
4. Australia: $US419,460 ($A556,000)
5. New Zealand: $US341,060 ($A452,000)
Source: Credit Suisse Global wealth report, 2020
In the rich-world stakes, Australia was ranked fourth with average wealth of $556,000 ($US419,460) for every adult, putting it ahead of New Zealand, the Netherlands, Singapore, Canada, Denmark and Ireland.
Australia ranked behind Switzerland, Hong Kong and the US, along with possibly Monaco and Liechtenstein which weren’t included in the study.
Australian average wealth levels rose by $46,545 ($US35,110) last year, which was second only to Canada.
Credit Suisse defined ‘wealth’ as assets, including real estate and superannuation, minus the debt.
Australia is home to 1.42million adults with a net worth of more than $US1million, the benchmark for the global study.
With 17.3million adults in Australia, more than 8 per cent of the voting-age population are millionaires.
By comparison, the United States has 20.2million millionaires compared with China’s 5.8million.
Globally, 51.9million people are millionaires.
The data was taken before Australia’s strong recovery from the Covid recession.
The Australian Securities Exchange’s benchmark S&P/ASX200 last week reached a new record high of 7,386 points, well above the pre-pandemic highs of February 2020.
The stronger share market has also boosted superannuation balances.
Average net wealth levels in Australia rank only behind Switzerland, Hong Kong and the US, a new report by Swiss bank Credit Suisse has revealed. The Australian Securities Exchange has also recently touched record highs
Australian real estate values have also surged since the end of national Covid lockdowns, with Sydney’s median house price during the year to May soaring by 14.8 per cent to $1.186million, CoreLogic data showed.
With interest rates in Australia at a record-low of 0.1 per cent, it’s little wonder Australia’s rich are getting richer, even if wages growth remains at weak levels across the economy.
‘Lower interest rates and relaxed credit conditions have supported asset prices, including house prices and the valuations of pension entitlements,’ Credit Suisse said.
Reserve Bank of Australia governor Philip Lowe has repeatedly vowed to keep the cash rate on hold until 2024 ‘at the earliest’.
But Westpac chief economist Bill Evans said the Reserve Bank was now likely to raise interest rates next year.
Australian real estate values have also surged since the end of national Covid lockdowns, with Sydney’s median house price during the year to May soaring by 14.8 per cent to $1.186million, CoreLogic data showed. Pictured are waterfront homes on Sydney Harbour
‘We expect the conditions necessary for the RBA to begin raising the cash rate will be achieved by late 2022,’ he said.
Australia’s unemployment rate fell to 5.1 per cent in May, a level lower than before the pandemic, and Westpac is forecasting jobless rate of 4 per cent by June 2022.
This would be an unemployment rate unseen since August 2008, during the early days of the Global Financial Crisis.
Mr Evans said this would negate the need for ‘COVID emergency rate settings’.