Why personal wealth in Australia is rising faster than other nations

The average wealth of Australian adults grew by nearly 10 percent last year, more than double the pace of 56 other countries, and we are now the second-wealthiest per capita in the world, according to the 2024 UBS Global Wealth Report. The median wealth of Australians is now USD$261,805 per person (AUD$387,612). The wealthiest people live in Luxembourg where the average resident is worth USD$372,258 (AUD$551,142).

UBS says the bulk of our rising wealth over the past year has come from gains in property values and superannuation. More than half of our wealth is in ‘non-financial’ or relatively illiquid assets such as bricks and mortar. This is unusual relative to our neighbours in the Asia-Pacific region, where 60 percent of personal wealth is held in shares, bonds, mutual funds and savings accounts.

Australia also has the world’s third-largest population of millionaires. According to UBS, 1,936,114 Australians are millionaires in US dollar terms, which equates to 10 percent of the population. By 2028, UBS forecasts that Australia will have almost 400,000 more millionaires at 2,334,015 people. Of the 56 countries covered in the report, the United States has the most millionaires at 21,951,319 people. This cohort is forecast to expand by almost 3.5 million people to 25,425,792 by 2028.

Property has delivered exceptional capital gains to Australian homeowners since the onset of the pandemic. Sydney home values are 28 percent higher today than they were in early 2020, according to CoreLogic data. Home values in Brisbane, Adelaide and Perth are more than 60 percent higher. In Hobart, property values are 28 percent higher, and in Canberra they are 32 percent higher. Melbourne home values are 11 percent higher.

UBS explains that rising wealth tends to go hand-in-hand with economic development. Since the Global Financial Crisis, wealth has risen fastest in the Asia-Pacific region at nearly 177 percent over 15 years. This has occurred alongside 192 percent growth in debt, however, UBS notes that “it is not uncommon for emerging economies to experience fast growth in credit as the financial system develops and matures”.

While global wealth is steadily rising, it is doing so at a slower pace. There are many reasons for this, including smaller rates of growth as countries become wealthier and their economies mature. Also, countries with aging populations tend to see falling rates of economic activity, which affects both personal and national wealth. Between 2000 and 2010, Australia’s annual compound growth rate in wealth was 15 percent. Between 2010 and 2023, it shrank to four percent. China’s annual growth rate has fallen from 19 percent between 2000 and 2010 to eight percent between 2010 and 2013.

The report also looked at wealth inequality and assigned a score of between zero and 100 to each of the 56 nations. A low score indicated more equality and a high score indicated greater inequality. Australia has an inequality score of 51 now. This is forecast to grow to 54 by 2028. Countries with a similar score include Japan (50), Italy (50), Belgium (51) and Finland (53). Saudi Arabia had the highest wealth inequality score at 89, followed by the United Arab Emirates (88), United States (76) and Sweden (74).