According to UBS’s Global Wealth Report, the ranks of Australian millionaires will grow by hundreds of thousands over the next five years – here are the reasons

A Swiss bank predicts the number of Australian millionaires will increase by 400,000 within five years.

UBS’s Global Wealth Report forecasts a 21 percent rise in the number of millionaires due to rising property values, wealth inheritance and a booming stock market.

That would mean Australia will have 2,334,015 millionaires in 2028, up 397,901 from 1,936,114 in 2023, or one in 10 adults based on wealth measured in US dollars.

Adjusted for population, Australia has more millionaires than the United States, New Zealand, the Netherlands or Singapore, but still lags behind Luxembourg and Switzerland.

To belong to the elite class, an Australian would have to have A$1.478 billion in assets, including the family home, minus any debt, because the Australian dollar is now worth just 67.7 US cents.

Someone who owned a median-priced home in Sydney, valued at $1.466 billion, and a car, would be classified as a millionaire in the UBS ranking.

In terms of median wealth, Australia ranked second behind Luxembourg, with a typical Australian wealth of US$261,805 or A$386,858.

But Australia ranked fifth on the average scale of overall wealth divided by number of people, with the average Australian owning US$546,184 or US$806,811 in assets, putting it behind Switzerland, Luxembourg, Hong Kong and the United States.

While 10 per cent of Australian adults are millionaires, in Luxembourg it is 16 per cent, compared to 15 per cent in Switzerland.

In the league table of new millionaires, Australia ranked 16th on UBS’s list of 36 G20 nations.

It was one spot behind Canada, which was also forecast to see a 21 per cent rise in the number of millionaires, taking their number to 2,402,200 – a figure similar to Australia’s.

Taiwan, the world’s top producer of computer chips, took the top spot and is expected to see its number of millionaires rise by 47 percent, despite veiled threats from China to invade the island by force.

The top 10 list also included Turkey, Kazakhstan and Indonesia, which had a smaller base of millionaires, along with Japan, South Korea, Israel, Mexico, Thailand and Sweden.

India, Brazil, Norway and Russia were ahead of Australia.

While the Australian stock market grew by just 7.8 percent over the last financial year, UBS expects a recovery in global markets to boost wealth creation in the coming years.

“The generally positive performance of financial markets across much of the world in recent years is one reason behind the observed growth in the number of dollar millionaires in our sample of markets, but it is far from the only one,” UBS said.

‘As most asset classes have seen their value increase in recent years, the sheer effect of steady economic growth is instrumental in the rise of dollar millionaires.

“This applies both to the past and to projections into the future.”

UBS noted that those with wealth owned their own homes and included this in its definition of someone’s worth.

‘Net worth or wealth is defined as the value of financial assets plus real assets (mainly housing) owned by households minus their debts,’ he said.

Inheritance was also expected to play a key role in wealth creation as baby boomers died off, with the oldest of this postwar generation turning 78 this year.

“It is often overlooked that wealth is often passed on within the same generation between spouses before being transferred from one generation to the next,” UBS said.

‘Life expectancy varies between men and women, and very often couples have an age difference, so the inheriting spouse will typically own and hold this wealth for an average of four years before passing it on.’

Europe’s wealthy nations, associated with colonialism, are expected to have fewer millionaires by 2028, with the UK forecast to decline by 17 percent and the Netherlands to fall by 4 percent.