Thanks to their houses, Australians are the richest people in the world, according to the investment bank Credit Suisse.
The fifth annual study by the Swiss bank of global wealth trends found the median Australian adult was worth more than $US225,000 ($258,000) in June, well ahead of the second wealthiest population on this measure, the Belgians, at $US173,000.
They were followed by the Italians, French and British, all at around $US110,000.
Only 6 per cent of Australians have wealth below $US10,000, compared with 29 per cent in the United States and 70 per cent for the world as a whole.
Household wealth in Australia is heavily skewed to "real assets" – essentially property – which average $US319,700 per household, or 60 per cent of gross assets. This is the second highest in the world after Norway.
The 2014 Global Wealth Report shows global wealth is 20 per cent above its pre-crisis peak and almost 40 per cent higher than the low recorded in 2008.
Australians have grabbed more than their fair share of the growing pie. The section of the report on Australia is titled "No worries", a headline that some economists may take issue with but which is deserved based on the rapid and almost uninterrupted accumulation of wealth over the past 14 years, as detailed in the report.
Since 2000, the net wealth of the average, or mean (as opposed to median), adult Australian has more than quadrupled, from $US103,151 to $US431,000. That makes us the second richest population on this measure, behind the Swiss at $US581,000.
Bank of America Merrill Lynch chief economist Saul Eslake attributed Australia's relatively even spread of wealth in part to its love of property.
"Rising house prices tend to reduce inequality, as they make up part a greater part of middle class wealth," he said.
Globally, the mean average per adult reached an all-time high of $US56,000, an increase of $US3450 over the previous 12 months, driven by higher share prices.
Why the hell would news like this make you sick? Isn't this good news, or would you prefer if we were not wealthy?
Some people are strange.
I would prefer we were rich through a more fungible, liquid asset class.
"It were not best that we should all think alike; it is difference of opinion that makes horse races." - Mark Twain on why he avoids discussing house prices over at MacroBusiness. "Buy land, they're not making any more of it." - Georgist Land Tax proponent Mark Twain laughing in his grave at humourless idiots like skamy that continually use this quip to justify housing bubbles.
This new international type of real estate market that is emerging whereby Australian property, development opportunities and farms are advertised in foreign press and markets is well and truly upon us this time around. There is always something new that pops up each cycle to help drive it along and the international buyer of property, development opportunities and land usage schemes is emerging as one of these new developments this time around for us.
Other real estate markets experienced the inflating effect of foreign buyers buying in their local market during the last cycle and I think we will now see this effect down under this cycle. Banking and capital movement facilities continue to become more efficient and the wealthiest 1% will quite happily allocate their capital into a nation with secure property rights, its only starting. So I expect to see us, as a nation, stay at the top end of these rankings due to the property wealth effect, forex rates will play a part but overall we will see what other nations saw last cycle, more foreign investors driving up prices.
Which asset classes do you reckon it would be better for our wealth to be stored in rather than property (and why?).
It would be better invested in growing businesses and industries for the future of this country.And you ask why ? So that we have jobs and Industries in future, which is THE economy, so that people can pay rent and purchase houses.
Let me ask you, don't we need those anymore ?
Other reasons are, when you divert so much of peoples pay packets towards higher house prices and debt levels, which encourages or forces people to pay interest only loans,it means longer lone periods are also being taken out. This all discis money away from the overall economy, and it simply starts decling, no rocket science required there, although your questions would prove otherwise.
The problem with investing in growing businesses and industries is, we don't have too many left, most are collapsing or dying thanks to all our money being diverted into housing and debt levels, which has slowly destroyed jobs and buisinesses and industries. And with chinese wages taking more of our jobs, and recent highs in Sydney and Melbourne ,with even higher debt levels than before and more people paying interest only loans, it will guarantee further and more rapid levels of economic decline,again,no rocket science. So there's(and why), but thanks to our government, the why does not work anymore, you only need to worry about( the when) now.
It would be better invested in growing businesses and industries
I think the article was talking about individual/personal wealth, rather than commercial. It's not really practical for the majority of individuals to own their own business. Unless you're suggesting people would be better off renting and storing their wealth in the equities markets instead of property? But that approach may be a lot riskier for most people (compared to owning their own home), especially when they're almost forced to speculate on equities via superannuation, so keeping the rest of their wealth in property is good diversification.
It would be better invested in growing businesses and industries for the future of this country.And you ask why ? So that we have jobs and Industries in future, which is THE economy, so that people can pay rent and purchase houses.
Let me ask you, don't we need those anymore ?
Other reasons are, when you divert so much of peoples pay packets towards higher house prices and debt levels, which encourages or forces people to pay interest only loans,it means longer lone periods are also being taken out. This all discis money away from the overall economy, and it simply starts decling, no rocket science required there, although your questions would prove otherwise.
The problem with investing in growing businesses and industries is, we don't have too many left, most are collapsing or dying thanks to all our money being diverted into housing and debt levels, which has slowly destroyed jobs and buisinesses and industries. And with chinese wages taking more of our jobs, and recent highs in Sydney and Melbourne ,with even higher debt levels than before and more people paying interest only loans, it will guarantee further and more rapid levels of economic decline,again,no rocket science. So there's(and why), but thanks to our government, the why does not work anymore, you only need to worry about( the when) now.
You have it the wrong way around. Wealth is not created by houses it is spent on houses.
Wealth always ends up in property.
Wealth is generated through productive work and we have a lot of that in Australia. Maybe you would prefer Australia to be a car manufacturing country, but that does not deliver the great wages and wealth that we enjoy here.
We export food and resources and have several other neat ways of making money eg education and niche industries. Do you even realise how lucky we are to live through these rich times?
We make our money with this and we compete with each other for the best homes to spend that wealth on. The wealth generated through our productive works ends up in big nice homes for ourselves.
Definition of a doom and gloomer from 1993 The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
I would prefer we were rich through a more fungible, liquid asset class.
Houses and land are personally owned property and are "real" tangible assets.
Would you prefer to own abstract paper assets which represent property held by other people? Bank accounts represent abstract money lent to banks, held and employed by banks for their own purposes. A $100 currency note represents abstract money which the government declares is exchangeable for an abstract $100. Bonds represent abstract money held and employed by the bond issuer for their own purposes. Share certificates/registry entries represent abstract money held and employed by company directors for their own purposes.
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