I know a lot of people are complaining about rising interest rates and a cost of living crisis, but believe it or not, Australians have earned the title of the world’s richest people for the second year running, according to the latest Credit Suisse Global Wealth Report for 2022.
Soaring property prices and increased savings lifted the median wealth per Australian adult by US$28,450 (A$42,780 equivalent) to US$273,900 in 2021, the report reveals, placing it in the top spot in the world’s ranking.
Belgium came in a close second place with a median wealth of US$267,890 per adult.
New Zealand placed in third with a median wealth of US$231,260 per adult.
Fourth, fifth and sixth place was taken by Hong Kong SAR (US$202,380), Denmark (US$171,170), and Switzerland (US$168,080).
But when measured by average wealth, Australia is fourth behind Switzerland, the United States, and Hong Kong, suggesting that wealth is more evenly distributed in Australia than in those countries.
Here’s the full list:
This increase was the fourth-highest seen globally in 2021.
Only seven countries, all with higher populations and bigger economies – the US, China, Japan, Britain, France, Germany, and Canada - had more millionaires than Australia last year.
“As in most other high-income countries we review here, disposable income in Australia rose significantly by 4.8% due to pandemic relief payments in 2020,” the Credit Suisse Global Wealth Report (2022) explained.
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“Private consumption, on the other hand, fell by 6.7%. Combined, these trends led to a jump in the household saving rate from 15.6% to 24.9%. The increased saving had a positive effect on financial assets and also led to some repayment of debt.”
Australia’s surging property prices also played an important role in boosting wealth.
Australia’s national dwelling values surged 28.6% through the pandemic growth phase, and while values are now -2.0% below April’s peak, they remain 23.3% higher than pre-pandemic April 2020 levels.
Going forward, Credit Suisse expects that worldwide inflation and the Russia-Ukraine war will hamper real wealth creation over the next few years.
“Nevertheless, global wealth in nominal US dollars is expected to increase by USD 169 trillion by 2026, a rise of 36%,” the report’s author said.
Low and middle-income countries currently account for 24% of wealth but will be responsible for 42% of wealth growth over the next five years.
Middle-income countries will be the primary driver of global trends.
Global wealth per adult is forecast to rise 28% by 2026 and to pass the threshold of USD 100,000 in 2024.
The number of millionaires will also grow markedly over the next five years to 87 million, while the number of ultra-high net worth individuals (UHNWIs) will reach 385,000, the report reveals.
Michael Marr, head of wealth management at Credit Suisse Australia, told the smh that in Australia, the number of millionaires is expected to rise another 35% to 2.9 million in 2026.
“Looking forward, we remain watchful as to the impact of rising inflation, the inevitable increase in interest rates with the knock-on effect on the valuation of the two principal sources of wealth, housing and financial assets, underpinned by GDP [growth].”