Australian wealth growing faster than debt

Australians are becoming richer, with new research showing their assets have grown faster than their debts since the Global Financial Crisis (GFC).

The Roy Morgan Wealth Report revealed the average per capita net wealth in 2017 was 30.5 per cent higher in 2017 than it was in 2007, after adjustment for inflation.

The value of personal assets grew even faster. The report was drawn from over half a million in depth face-to-face interviews conducted over the decade since 2007.

Key findings of the report include:

  • Average personal assets are now worth 7.9 times average debts, compared with 7.2 times debts a decade ago.
  • The top 10 per cent of Australians now have an average net wealth (assets minus debts) of $2 million.
  • Average per capita net wealth, adjusted for inflation, is 30.5 per cent higher than it was before the onset of the global financial crisis (GFC).
  • Growth in wealth has not been evenly spread, with the richest 10 per cent of Australians holding 48.3 per cent of net wealth in 2017 compared with 46.8 per cent a decade ago, and the poorer half of the population holding just 3.7 per cent of net wealth compared with 3.9 per cent a decade ago.
  • Women have improved their average net wealth position relative to men, with males now holding an average of 10.6 per cent more than women compared to 26.5 per cent a decade ago.
  • Roughly half Australia’s personal wealth is held in the form of housing (51.9 per cent), down slightly from 52.4 per cent in 2007, while superannuation assets make up a slightly higher portion, rising from 19.6 per cent to 21.8 per cent of our wealth since 2007.

The first edition of the Wealth Index Report focuses particularly on how net wealth has changed since just before the onset of the GFC. Australia performed strongly over the past 10 years compared with other OECD nations – particularly in Europe where many nations went backwards over the same period.

Roy Morgan’s Michele Levine said analysis of Australia’s debt data revealed a more balanced picture than might have been expected.

“Housing debt has grown considerably over the past 10 years, but not uniformly,” Ms Levine said.

“Our data shows wealthier cohorts have shown a much greater propensity to take on debt and those investors have more ability to handle downturns than more marginal borrowers in lower-wealth segments.

“A more detailed understanding of how debt and personal wealth are distributed can help dispel some of the more simplistic fears over debt and give a more balanced view of its relationship to wealth creation in Australia.”

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