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Even though the cost of living crisis is making us feel like we don’t have much money, it turns out that Australians are actually pretty wealthy.
Many Aussies are having a hard time right now, but research from a big international bank shows that we’re actually the richest people on the planet.
This is what the 2022 Global Wealth Report from Credit Suisse, which looked at the wealth of 5.3 billion households around the world, says.
It found that Australians came out on top, with a staggering median personal wealth of $US273,900 ($A415,412) per adult.
Belgium came in second with $US267,890 ($A406,296), New Zealand came in third with $US231,260 ($A350,741), Hong Kong came in fourth with $US202,380 ($A306,941), and Denmark came in fifth with $US171,170 ($A259,606).
Switzerland, Canada, the Netherlands, the United Kingdom, and France made up the rest of the top 10.
Median wealth divides the distribution of wealth into two equal groups: those with wealth above the median and those with wealth below the median. It is thought to be a more accurate measure of wealth than the average wealth, which is calculated by dividing the total wealth by the number of adults.
The report said that when countries are ranked by how much money the average adult has, those with less wealth inequality do better. In 2021, the US added the most household wealth of any country, followed by China, Canada, India, and Australia. One reason Australia did so well was because house prices went through the roof in 2020 and 2021.
“Significant increases in GDP and strong equity and housing markets are expected to lead to large gains in wealth at the country level," the report said. This was definitely the case in 2021. “The housing market was slow at the height of the pandemic, but it picked up in the second half of 2020 and kept growing in 2021.
One reason Australia did so well was because house prices went through the roof in 2020 and 2021.
“Significant increases in GDP and strong equity and housing markets are expected to lead to large gains in wealth at the country level," the report said. This was definitely the case in 2021.
“At the height of the pandemic, the housing market was slow at first, but it picked up in the second half of 2020 and continued to grow in 2021.
“Low interest rates may have been one reason why the housing market was doing so well. In 2021, house prices in no country fell, which was unusual. Most of the time, house price increases stayed within a fairly narrow range, between 5% and 15%. There were some big gains, like in New Zealand (25%), Australia (31%), Saudi Arabia (34%), and Turkey (60%)."
The report also had a separate analysis of Australia and New Zealand’s economic trends. It said, “Although the Covid-19 pandemic had few effects on public health in Australia and New Zealand, both countries lost money in 2020 because of lockdowns and less international trade."
It said that Australia’s real GDP fell by 2.2%, but that the country’s 4.7% growth in 2021 “more than made up for the losses in 2020."
It said that unemployment would rise from 5.2% in 2019 to 6.5% in 2020, then fall back to 5.1% in 2021. It also said that Australia’s disposable income would rise by 4.8% in 2020 because of pandemic relief payments, while private consumption would fall by 6.7%.
“Taken together, these changes caused the household saving rate to jump from 15.6% to 24.9%," the report said. “The increase in savings was good for financial assets and also helped pay off some debt."
In 2021, things got back to normal. Disposable income only went up 1.6%, but consumption went up 5.1%, which was almost enough to make up for the drop in 2020.
But at the same time that people saved, public debt went from 46.8% of GDP in 2019 to 57.8% of GDP in 2020.
