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Big jump in worth of people

SURGING real estate values, a stable share market and a strong trading relationship with China helped to swell the ranks of Australia's rich by 11 per cent, or 12,000, to 117,000 last year.
An appreciating Australian dollar also helped many more Australians jump the $US1 million ($1.4 million) wealth barrier to qualify as a high net worth individual (HNWI), according to the Merrill Lynch/Capgemini World Wealth Report.
The average wealth - defined as excluding the family home but including superannuation - of the rich at the end of 2003 was $US3.2 million, compared with the global average of $US3.7 million. Their total wealth increased by $US38 billion to US$368 billion, up 12 per cent on 2002.
While there was no Australia-specific breakdown of how that wealth is held, the average HNWI Australians' exposure to property was estimated at 34 per cent, double the 17 per cent global HNWI average.
"There's no doubt that property is ingrained in the Australian psyche the way that fixed interest is in Europe," said Peter Opie, Merrill Lynch vice-president, investments in Australia.
For the first time, Australia ranked in the top 10 countries or growth in the number of its HNWIs, coming in at 8 per cent - ahead of Britain and Canada.
Top of the tree was Hong Kong, which enjoyed 30 per cent growth, followed by India (22 per cent), Spain and Korea (18 per cent), the US (14 per cent) and the Czech Republic (12 per cent). "It's significant that five out of these top 10 countries for growth in HNWIs have major trading relationships with China," said Tom Alexi, Australian head of Merrill Lynch Global Private Clients.
He said this was evident in the "standout" 10 per cent wealth growth recorded for the Asia-Pacific region, ahead of Europe (3.7 per cent) and Latin America (2.1 per cent), and second only to North America (13.6 per cent).
"For Australia, there was strong GDP growth, as well as strong property and share market growth," Mr Alexi said. "Australia does feel like a country that is doing really well."
Australian GDP growth was 3 per cent in 2003, while the share market advanced 11.1 per cent - hitting record highs in December.
Australia for the first time ranked in the top 10 countries, the growth recorded in the number of its HNWIs - ahead of Britain and Canada.
The survey, compiled from a mix of national account figures, International Monetary Fund and World Bank data, found there were 7.7 million HNWIs globally, a rise of 7.5 per cent on 2002. The combined wealth of these individuals was up 7.7 per cent to US$28.8 trillion, also double that- of the growth previously (3.6 per cent).
During 2003, the average global HNWI increased their exposure to the share, market by a hefty 15 per cent to 35 per cent of their portfolios, as world share markets rose.
On this measure, Australian HNWIs are believed to be on a par with, global. trends.