Aussie millionaires hold twice as much property as their global counterparts

June 26, 2014, 10:59 am Property Observer Yahoo7 Finance

A strong economy, with GDP growth of 2.4 per cent in Australia compared with the global average of 2.2 per cent, and Australian share market gains of 15 per cent also helped boost the ranks of Australian millionaires.

Australian millionaires hold over 40 per cent of their wealth in property, more than double the global average, the 18th annual World Wealth Report has found.

The report by Cap Gemini revealed there were 218,700 people in Australia who had $1.2 million or more to invest (excluding their family home). That was up by 5.8 per cent from 206,600 people a year earlier.

Cap Gemini wealth management specialist Dorus van den Bizenbos told Property Observer that Australian millionaires had always held around 35 to 40 per cent of their wealth in real estate over the time since the first survey was conducted.

“The Australian dream is to own your home and people invest a lot in real estate because the market has been going up for years. It’s understandable and tangible and people want to own property,” van den Bizenbos said.

Real estate values across Australia rose 6.5 per cent from 2013 to 2014, Cap Gemini’s analysis found. Van den Bizenbos said rising property prices were one of three contributors to the increase in the number of Australian millionaires during the year.

A strong economy, with GDP growth of 2.4 per cent in Australia compared with the global average of 2.2 per cent, and Australian share market gains of 15 per cent also helped boost the ranks of Australian millionaires.

Rich people around the world held an average of 18.7 per cent of their wealth in real estate, the 2014 World Wealth Report found.

Related: Australia powerless to stop illegal house purchases

That was down from 20 per cent in the 2013 report, with the shift going towards fixed income and alternative assets such as hedge funds, structured products and private equity funds.

“What we’ve seen is that people have started to spread out their wealth more,” van den Bizenbos said. “They retreated to cash in times of uncertainty and now they have got more confidence they are starting to invest more in alternatives.”

The report found there were 13.73 million high net worth individuals (people who had more than US$1 million to invest) in the 2014 report, almost two million more than in the previous year. That represented a 15 per cent growth rate, the second largest increase since 2000.

North America had the largest number of high net worth individuals, while the Asia Pacific region was second and quickly catching up.


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3 Comments

  1. bob01:06am Friday 27th June 2014 ESTReport Abuse

    No government has the courage to scrap negative gearing, one of the the cancers including salary sacrirficing into super that are designed as tax avoidance measures to increase wealth, take a trip around the world ,even communist countries to see the consequences, we are now a second world country and slipping fast.

    Reply
  2. Freeman06:47pm Thursday 26th June 2014 ESTReport Abuse

    Just a warning to any property sellers - beware of ADAM FURLONGER who operates under RESIDENTIAL PROPERTY STRATEGIES Pty Ltd, offering advice on how to sell your property for a much higher price in a much faster time in exchange for 1% of the sale price. This guy targets property that has been on the market long term (a year or more ) with unsolicited mail and after he locks you into a 1 year contract, proceeds to preach doom and gloom and urges you to drop your price, completely at odds to all his claims in promotional material. My advice is to steer well clear of this scam.

    1 Reply
  3. 12:57pm Thursday 26th June 2014 ESTReport Abuse

    property that gives you an income a has cpi growth gives a double edge sword....

    Reply
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