Big rise in number of Aussie millionaires

Australia is now tenth in the world when it comes to the number people with net worth above $US1 million excluding their home / File Source: Supplied
THE number of Australian millionaires has risen 34 per cent rise as the world's wealthy recover most of their losses from the global financial crisis, a study shows.

Australian millionaires totalled 173,600 at the end of 2009, up from 129,200 at the end of 2008, the latest World Wealth Report by investment bank Merrill Lynch and consultancy Capgemini said.

That sees Australia rise to tenth in the world for number of millionaires, after slipping to eleventh in 2008.

The total wealth of what the report terms "high net worth individuals'' (HNWI) - people with net assets of at least $US1 million ($1.15 million) excluding their home - in Australia was $US519.4 billion ($596.6 billion) in 2009, up 37 per cent on $US379.8 billion in 2008.

Managing director of Merril Lynch's global wealth management division in Australia and New Zealand, Chris Selby, said Australians' wealth benefitted from resilient gross domestic product (GDP) growth and national savings.

The main driver of wealth, however, was the rebounding share market, he said.
"After a horrible 2008 where (the market) was down almost 50 per cent, 2009's growth was 33 per cent,'' Mr Selby said.

"The millionaire population was a huge beneficiary. "Australia has a very strong equity culture, so clearly the driving market capitalisations helped the wealthy.''
The US, Japan and Germany remain the world's wealth powerhouses, home to 54 per cent of the world's HNWIs.

Developing Asian countries posted the strongest growth in numbers of millionaires in 2009, led by Hong Kong and India. That saw the value of the Asia-Pacific region's HNWIs surpass Europe's for the first time in 2009, at $US9.7 trillion ($11.14 trillion) compared to Europe's $US9.5 trillion ($10.91 trillion).
The global financial crisis.Overall, the number of the world's HNWIs and their value have returned to 2007 levels, indicating a recovery from

"Clearly it is as almost as though the year of 2008 never happened,'' Mr Selby said.
A symptom of the crisis was a rise in spending on luxury items, such as cars, boats and jets, Merril Lynch senior vice president of investments in Australia, Peter Opie said.

Millionaires spent 30 per cent of their so called "passion investments'' on those items in 2009, up from 27 per cent in the previous year.

The very rich — those with disposable assets exceeding $30 million — did even better, increasing their wealth by 21.5 percent, the report said. The very rich, however, took a bigger hit in 2008, losing 24 percent of their fortunes.

The report did take note of the concentration of wealth among the very rich. At the end of 2009, it said, these “ultra-high net worth individuals” held 35.5 percent of the total $39 trillion of the world’s wealth, or an estimated $13.8 trillion, even though this group represented less than 1 percent of the 10 million people classified as being rich, or roughly 90,000 worldwide.

Based on the report’s numbers, rich people had wealth averaging about $3.9 million last year, while ultra-rich people had fortunes averaging about $150 million.
As expected, the most millionaires could be found in the United States, where their ranks rose 16.5 percent, to 2.87 million, last year, according to the report. Their total wealth in North America rose 17.8 percent, to $10.7 trillion. Once again, the number of very rich people in North America was much smaller, at just 36,300, the report said.

Meanwhile, Asia, with three million rich people, has as many millionaires as Europe for the first time. But Asia’s rich were slightly wealthier, controlling $9.7 trillion at the end of 2009, compared with $9.5 trillion held by their European counterparts.

Japan had the second-largest group of millionaires, totaling 1.65 million, while Germany came in third, with 861,000. China came in fourth, with 477,000 millionaires, edging past Britain with 448,000.

Merrill Lynch and Capgemini said they based their report on a survey of investors in 71 countries that accounted for 98 percent of the world’s gross national income and 99 percent of the world’s stock market capitalization.