Private wealth in Australia booms to $6.1 trillion and $279,000 per Aussie

14 December 2018 Consultancy.com.au

Total wealth held in Australia rose strongly over the 10 years to $US 6.1 trillion in 2017 from $US 3.4 trillion in 2007. As a result, wealth per capita in Australia has risen by 83% to sit at $US 279,000, making Australia one of the 10 wealthiest nations of the world.

The recent ‘Australia 2018 Wealth Report’ has revealed Australians now hold $US 6.1 trillion in net assets, almost doubling over the last 10 years. The study by research consultancy firm New World Wealth was up strongly from $US3.4 trillion a decade ago. This makes Australia the world’s ninth largest wealth market according to total wealth held. It follows USA, China, Japan, UK, Germany, India, France and Canada in the rankings.

Australia’s wealth grew with the help rising of real estate values, especially on the East Coast. There, a strong local equity market, and high performing industry sectors including financial services, professional services, real estate, transport, IT, telecoms and healthcare helped to further propel growth. If the total assets in the nation were equitably divided among the 24.6 million people living in Australia, this would see each hold $US 279,000.

However, this is not the case, as around $US1.7 trillion of current wealth, or 28%, of this is held by high net worth individuals (HNWIs). These are people who hold net assets of $US1 million or more. At present, there are only 377,000 of these people living in Australia, and that tally is only expected to rise to 650,000 over the next decade. Part of this is accounted for by the estimated 12,300 multi-millionaires living in Australia, each with net assets of $US10 million or more. An even smaller proportion of HNWIs are the 455 centi-millionaires living in Australia, each with net assets of $US100 million or more, and Australia hosts just 36 billionaires.

Total private wealth held in Australia (US$ trillion)

Again, an average of the figures suggests that the average Australian is now significantly wealthier than the average US citizen. A decade ago the reverse was true, while if the financial hubs and tax havens of Monaco, Liechtenstein, Luxembourg and Switzerland were to be excluded from the calculations, then Australia ranks first in the world on average wealth per person in US dollars – however it is worth questioning how meaningful any of that is, if such a large portion of that wealth materially resides with a minority of the population.

Looking forward, Australian wealth is expected to continue seeing strong growth over the next 10 years, reaching a total of $US10.4 trillion by 2027. This will make Australia the seventh largest wealth market in the world by 2027, shifting up from seventh, and leapfrogging Canada and France in the process, while putting the country within touching distance of Germany and the UK.

There are a number of reasons this rosy forecast, according to the research. Low population density and a mineral-rich large land area mean that there is less competition for natural resources domestically, so larger exports can be afforded. The perceived safety of the country also helps foster wealth growth, with Australia recently rated one of the five safest countries for women, alongside with Iceland, Malta, New Zealand and Canada. At the same time, Australia’s geographic position has enabled the development of strong business ties with Asia including China, Japan and Korea.

Related: Oceania’s billionaire club grows by nine.

News

More news on