Australians The Wealthiest in Five Years

Posted on January 17th, 2013 · Posted in News

Australians are the wealthiest they have been in five years despite worries about the global economy and cost of living pressures at home. Figures released by the Australian Bureau of Statistics show household wealth climbed 18.4% in the past year to $69,422 per person.

CommSec economist Savanth Sebastian said the data showed Australians were still pouring money into savings accounts, aggressively paying down their debts and had benefited from a stronger share market in recent months.  He said people remained spooked by reports of global financial uncertainty and were holding back, but their conservatism was not warranted.  “Consumers may not be feeling wealthy because of the doom and gloom but we are heading back to towards record levels,” he said.  “The global financial crisis caused the biggest ever drop in wealth for Australian households. However, wealth levels have continued to repair over the past couple of years.”  Wealth per person is still down 5.1% over the past three years, but Mr Sebastian said falling interest rates and an improving share market could push it to new highs in the coming months. “Households had a record $748.6 billion in cash and deposits at the end of September 2012. Cash and deposit holdings represented 23% of assets, above the decade average of 20.4%.”

Social researcher Mark McCrindle said Australians were feeling insecure rather than wealthy, with memories of the GFC still raw and hitting sentiment as they watched reports of financial turmoil overseas.  “Then they open their mail and their water and electricity bills are going ballistic,” he said.  “We have found when people are looking to 2013 and the fears they have about the year ahead, cost of living is number one. Even for Generation Y it’s number one.”  Mr McCrindle said Australia’s economic fundamentals were “great”, with low interest rates, low unemployment and a stable economy.  “But it doesn’t matter how often the Treasurer says we are in the best place in the world, it just doesn’t feel that way,” he said.  “Whether the storm clouds prove to be a storm or not, people are seeing storm clouds. People feel the economy could turn quite quickly and they don’t want to be exposed again.”

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