Posted by Tracey Evans on 22 February 2014
Australia has set a high standard with personal wealth, according to a recent report from Credit Suisse, the nation hosts some of the world’s richest citizens. In fact, Australia has the highest median wealth per adult (US$220,000) well ahead of the next on the list, Luxembourg (US$183,000).
Australia also has a bigger proportion of people worth more than US$100,000 than any other country. It’s eight times the world average. That puts it in league with the top 1 per cent of the world’s wealthiest including North America as well as countries in Western Europe, the Middle East and parts of Asia.
Switzerland tops the list where average wealth per adult is US$513,000. Australia (US$403,000), Norway (US$380,000) and Luxembourg (US$315,000) are in second, third and fourth places respectively with the United States, Sweden, France, Singapore, Belgium and Denmark close behind.
New Zealand comes in a little further down the list but it claims strong growth in the past decade, putting it in the top four countries experiencing the biggest gains in household and individual wealth. In 2000, wealth per adult in Zealand was just under US$48,000, while in Australia it was US$103,000.
If millionaire status is any indication, Australia is also lining up with the heavy hitters, counting 1.1 million of them. That puts us in the top eight of a list topped by the United States, with 13.2 million millionaires. New Zealand has 73,000 millionaires.
In an interesting aside from the Credit Suisse research, analysis suggests that it takes 10 generations or more before the wealth of a person in North America is completely independent of the wealth of their ancestors.
But the US dollar plays a big part in how wealthy Australia appears and, given the strength of the Aussie dollar in the last few years, the country looks a little more cashed up. The Guardian economist Greg Jericho says that when measured at a constant exchange rate over the past three years, the average wealth of Australian adults is actually closer to $328,900.
What’s in the wallet?
Both Australians and New Zealanders prefer to hold their wealth in non-financial assets such as real estate. A total of 74 per cent of New Zealanders’ portfolios were in such assets compared with 59 per cent of Aussies.
House prices increased during the last financial year by 3.8 per cent in Australia but by 6.2 per cent in New Zealand, while market capitalisation increased by 24.5 per cent in Australia and 17.6 per cent in New Zealand.
All things considered
Worldwide, wealth has more than doubled since 2000. Economic challenges notwithstanding, Credit Suisse says the overall outlook is “broadly positive”. It’s forecasting a rise of 40 per cent in global wealth over the next five years, thanks largely to emerging economies. Not surprisingly, China is predicted to deliver half of that growth.