Author: Susan Edmunds

New Zealand is the world's fifth-richest country on a per-adult basis, a new report shows – and that's partly thanks to our house prices.

The Credit Suisse Research Institute has released its latest Global Wealth Report, which shows that global wealth rose by US$9.1 trillion (NZ$14.2 trillion) or 2.6 per cent compared to last year, to US$360.6 trillion.

For the first time, New Zealand has been included in the report.

In New Zealand, total wealth rose 4.2 per cent of the 12 months to mid-2019 and wealth per adult increased 3.1 per cent.

That was despite a 0.8 per cent decline in the New Zealand dollar compared to the United States' currency.

"New Zealand is the world's fifth richest country as measured by per adult wealth. Only Switzerland, Hong Kong, US and Australia rank higher. New Zealand's wealth is also reasonably evenly distributed, with median wealth also being the fifth highest in the world. Both rankings represent improvements on the previous year," said John Woods, Credit Suisse's chief investment officer for Asia-Pacific.

Overall, since the year 2000, wealth per adult in New Zealand has grown at an average annual rate of 8.1 per cent in US dollars and 5.7 per cent in New Zealand dollars.

At the start of the century, wealth per adult in New Zealand was US$71,630, placing it 24th among the leading 100 economies.

But steady growth had lifted it to fifth, behind Australia, but ahead of Singapore and Canada. Median wealth of US$116,440 is also fifth highest in the world. The average is US$304,120.

The report said real household assets had grown more quickly than financial assets due in part to rising house prices.

In mid-2019, real assets made up 47 per cent of gross household wealth, compared with an average of 42 per cent in the year to mid-2011.

"Almost half of average wealth comprise of real household assets due mainly to rising house prices. Importantly, household debt has been declining in relative terms since 2008," Woods said.

The report said household debt had declined in relative terms since 2008, and now averaged US$43,240, which equates to 12.4 per cent of gross wealth.

New Zealand also had below-average wealth inequality for a high-income country. The top 1 per cent wealthiest  New Zealanders hold 19 per cent of the wealth.

That compares to the top 1 per cent owning 45 per cent of net assets on a global basis.

Only 9.3 per cent of New Zealanders have assets of less than US$10,000.

The proportion of the population with wealth of more than US$100,000 is 54 per cent, which is about five times the global average. The country has 0.4 per cent of the world's top 1 per cent wealthiest people, despite having only 0.1 per cent of its population.


The report noted that, for the past decade, most wealth creation had centred on China and the United States.

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The US accounts for 40 per cent of dollar millionaires worldwide and 40 per cent of the global top 1 per cent.

Wealth in China started the century from a lower base but grew at a faster pace during the early years and it was one of the few countries to avoid the impact of the global financial crisis.

"China's progress has enabled it to replace Europe as the principal source of global wealth growth and to replace Japan as the country with the second-largest number of millionaires," the report said.

"More tellingly, China overtook the United States this year to become the country with most people in the top 10 per cent of global wealth distribution."

India was the region with the biggest year-on-year increase in total wealth, up 5.2 per cent. But it also had the biggest increase in debt.

Note from Nighthawk.NZ:

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