Global financial crisis has cut our average wealth by $33,500

The average Australian’s wealth has fallen by $33,500 to $217,000 since the start of the global financial crisis, according to new figures from CommSec.

But there is some good news – the recent improvements in share prices and house prices should ensure that wealth levels have bottomed out.

The figures, compiled by CommSec using figures from Federal Treasury and the Australian Bureau of Statistics, show the Australian wealth levels have fallen by about 13% in the last 12 months, with wealth held in property, shares and other assets falling for five straight quarters.

One of the big contributors to this fall has been a slump in dividends paid by listed companies, which fell by a record 27% in the last year. This has been particularly felt by retirees, for whom dividends are an important source of household income.

But CommSec expects the bad news is over and wealth probably increased during the three months to the end of June.

“House prices have risen over the last few months, while equity markets have improved substantially. The bottom line is the slide in wealth is over,” says economist Savanth Sebastian.

He also suggests that the timeframe when looking at wealth levels is important.

“No one is disputing that wealth levels have taken a large hit over the past 18 months, however the near doubling of wealth levels over the past 10 year will provide a buffer for many Australians. And despite the unprecedented five straight quarters of declining wealth levels, there is likely to be some good news in coming quarters.”