Australians millionaires hold over 40% of their wealth in property, more than double the global average, the 18th annual World Wealth Report has found.
The report by Cap Gemini revealed there were 218,700 people in Australia who had US$1 million or more to invest (excluding their family home). That was up by 5.8% from 206,600 people a year earlier.
Cap Gemini wealth management specialist Dorus van den Bizenbos told Property Observer that Australian millionaires had always held around 35 to 40% of their wealth in real estate over the time since the first survey was conducted.
“The Australian dream is to own your home and people invest a lot in real estate because the market has been going up for years. It’s understandable and tangible and people want to own property,” van den Bizenbos said.
Real estate values across Australia rose 6.5% from 2013 to 2014, Cap Gemini’s analysis found. Van den Bizenbos said rising property prices were one of three contributors to the increase in the number of Australian millionaires during the year.
A strong economy, with GDP growth of 2.4% in Australia compared with the global average of 2.2%, and Australian share market gains of 15% also helped boost the ranks of Australian millionaires.
Rich people around the world held an average of 18.7% of their wealth in real estate, the 2014 World Wealth Report found. That was down from 20% in the 2013 report, with the shift going towards fixed income and alternative assets such as hedge funds, structured products and private equity funds.
“What we’ve seen is that people have started to spread out their wealth more,” van den Bizenbos said. “They retreated to cash in times of uncertainty and now they have got more confidence they are starting to invest more in alternatives.”
The report found there were 13.73 million high net worth individuals (people who had more than US$1 million to invest) in the 2014 report, almost two million more than in the previous year. That represented a 15% growth rate, the second largest increase since 2000.
North America had the largest number of high net worth individuals, while the Asia Pacific region was second and quickly catching up.
This article originally appeared on Property Observer.