It’s happening all around the world – the rich are getting richer.
And it’s the same here in Australia where et wealth has grown strongly over the past decade, in part on the back of rising property values.
And the big gains have been among the wealthiest 10%, with the rich are getting substantially richer with the poorest 50 per cent of Australians slipping from a 3.9% share of private wealth 10 years ago to 3.7% in 2017.
This information comes from the recently released Roy Morgan Wealth Report which interestingly shows that the gender gap in wealth has narrowed from 26.5% to 10.6% over ten years
The report is based on over half a million in depth face-to-face interviews conducted over the decade from 2007 to 2017 across Australia.
Key findings of the report include:
- The wealthiest 10% of Australians now have an average net wealth (assets minus debts) of over $2 million and hold 48.3% of net wealth compared to 46.8% in 2007, while the poorest 50% of Australians have seen their total share of net wealth fall from 3.9% to 3.7%.
- The top 10% of Australians .
- Growing personal wealth is highly correlated to income level, with those earning over $130k having an average net wealth ($1.2 million) nearly five times those earning under $15k ($248k).
- Country NSW and Victoria are falling behind their states’ capital cities, mainly due to capital gains in the metropolitan housing markets – though in other states country areas are only marginally behind their capital cities.
Wealthier Australians have prospered while poorer segments stagnate
Source: Roy Morgan Single Source (Australia) 12 months to December 2017, n = 50,139; 12 months to December 2007, n=54212 Base: Australians 14+.
Other findings of the report include:
- Average personal assets are now worth 7.9 times average debts, compared with 7.2 times debts a decade ago.
- Average per capita net wealth, adjusted for inflation, is 30.5% higher than it was before the onset of the global financial crisis.
- Growth in wealth has not been evenly spread, with the richest 10 per cent of Australians holding 48.3% of net wealth in 2017 compared with 46.8% a decade ago, and the poorer half of the population holding just 3.7% of net wealth compared with 3.9% a decade ago.
- Women have improved their average net wealth position relative to men, with males now holding an average of 10.6% more than women compared to 26.5% a decade ago.
- Roughly half Australia’s personal wealth is held in the form of housing (51.9%), down slightly from 52.4% in 2007, while superannuation assets make up a slightly higher portion, rising from 19.6% to 21.8% of our wealth since 2007.
- Australia performed very strongly over the past ten years compared with other OECD nations – particularly in Europe where many nations went backwards over the same period.
Australian wealth growing faster than debt
The value of assets held by Australians continues to grow faster than debts, resulting in average per capita net wealth being 30.5% higher in 2017 than it was in 2007 in inflation adjusted terms.
Source: Roy Morgan Single Source (Australia) 12 months to December 2017, n = 50,139; 12 months to December 2007, n=54,212. Base: Australians 14+.
Michele Levine, CEO, Roy Morgan, commented:
“Inequality is a growing problem, but if policy makers and the business community are going to turn that around they have understand the complexity of the low-wealth groups.
“It would be easy to look at the lowest 10% by net-wealth and think of them as a stranded group of ‘poor people’ – but it’s not that simple.
“In that poorest 10% there is a large group of young Australians who have built up neither assets nor debts – hence their low net-wealth. And there is also a group of older Australians who own substantial assets, but whose large debts cancel out their net-wealth and bring it into the lowest 10% group.
“Tackling inequality is not a matter of left or right – addressing the needs of poorer groups benefits the entire community and the economy generally.
“But that is not going to happen unless we break ‘the poor’ down into the right sub-groups and find solutions suited to their particular needs.
“Further detailed analysis of deciles can be found in the newly released Roy Morgan Wealth Report.”
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