The wealth of Australians has doubled in the past five years thanks to rampant sharemarkets and buoyant house prices, Australian Bureau of Statistics and Treasury data has shown.
Private sector wealth, including shares, property and assets, reached a record $8,829 billion at the end of September 2007.
Per capita wealth stood at a record $418,000 at the end of September 2007, up $65,500 on the previous year, according to Commonwealth Securities.
CommSec chief economist Craig James said financial advisers should use the findings as an opportunity to get their clients to look at the bigger picture.
“It’s a case of getting people to realise the sorts of gain that they have made. A lot of people focus on the short term – things like share prices and portfolios,” James said.
“I think it’s important for planners to demonstrate the challenges of a longer period of time and get people to realise how far they have come [and] how wealth levels have improved and get people to plan accordingly.”
James said rising wealth levels resulted in greater confidence among Australians, which meant rising interest rates did not seem to have impacted on the economy.
“Overall it is a very positive thing that Australians’ wealth levels are rising,” James said.
“Since September, the sharemarket has softened and share prices have eased. Wealth has fallen slightly. If the RBA [Reserve Bank of Australia] does lift rates next week, or in May, the rate rises will have more sting.”
