Australians are the richest people in the world

Detached home prices rose a whopping 24.6 percent in 2021, according to data from CoreLogic, and unit values ​​rose 14.2 percent. The ASX 200 achieved a total return of 17.2 percent last year.

Based on average wealth, Australia was the fourth richest country in 2021, after Switzerland, the US and Hong Kong. The average Australian adult was worth $550,110 at the end of last year, after enjoying an annual wealth increase of $66,350.

Favorable market conditions pushed an additional 390,000 Australians into the 62.5 million strong global cohort of US dollar millionaires.

But the asset price boom has exacerbated wealth inequality. The richest 1 percent of Australians owned 21.8 percent of the country’s wealth in 2021, up from 19.6 percent in 2007.

Millionaire’s paradise

Australia had 2.18 million US dollar millionaires in 2021, or 3.5 percent of the global total.

Only seven countries – the US, China, Japan, Britain, France, Germany and Canada – had more millionaires than Australia.

Credit Suisse expects the number of local US dollar millionaires to grow to 2.94 million by 2026, which would be a 35 percent increase.

Credit Suisse says: “With limited GDP growth and the possibility that asset prices will fall from their peaks by the end of 2021, we foresee a 13 percent increase in the number of millionaires in the United States over the next five years. compared to a 97 percent increase (to 12.2 million) for China.

“We expect little or no change in the millionaire rankings of the countries with the second highest number of millionaires: Japan, the United Kingdom, France, Germany, Canada and Australia.”

Australia is now home to 4,630 very high net worth individuals, after another 1,350 adults crossed the $100 million threshold last year.

There were 84,490 high net worth individuals worldwide at the end of 2021, more than half of whom live in North America.

Real Estate Lovers

The report says that “the overall composition of assets or wealth in Australia has not changed much since 2000” and Australians have a relatively high preference for housing compared to their global peers.

According to research by the Reserve Bank of Australia, more than 95 percent of homes in the country are owned by households, compared to about 80 percent in the US and 70 percent in Germany.

Financial assets such as equities made up about 39.5 percent of Australians’ gross wealth in 2021, which was below the typical 55 percent level for a high-income country.

Falling real estate prices and turbulent stock markets are likely to contribute to slower growth or an outright decline in wealth this year.

Credit Suisse’s head of wealth management, Michael Marr, said it is unlikely that the favorable conditions underlying last year’s staggering wealth gains will continue.

“Looking ahead, we remain vigilant for the impact of rising inflation, the inevitable rise in interest rates with the knock-on effect on the valuation of the two main sources of wealth, housing and financial assets, supported by GDP.”

Barrenjoey chief economist Jo Masters said Monday she expected higher interest rates to cause a 16 percent drop in property prices across the country and a 25 percent drop in Sydney.

House prices in the capital have fallen 4.4 percent in the past three months, driven by a 6.3 percent drop in Sydney, according to CoreLogic’s daily home value index. Prices in Brisbane were 4 percent lower in the quarter and prices in Melbourne fell by 3.9 percent.

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