Thursday, 7 November 2019
Fears for Australia's economy as retail sales plunge to their lowest level since the 1991 recession and houses become more unaffordable
Credit Suisse regards Australia as the world's second richest nation per capita
The land Down Under hasn't had a recession since 1991 but that could soon end
Australian retail sales have plunged to the weakest level in more than 28 years
Cash register activity is now at the weakest level since the last recession in 1991
Sydney and Melbourne are also among the world's most expensive for housing
By STEPHEN JOHNSON FOR DAILY MAIL AUSTRALIA
PUBLISHED: 02:05 GMT, 8 November 2019 | UPDATED: 02:27 GMT, 8 November 2019
Australia is the world's second richest nation when it comes to the wealth of middle-class individuals but that may not last.
Swiss financial services giant Credit Suisse rates Australia as the world's most cashed-up nation after Switzerland, based on median per capita wealth.
The land Down Under also holds the world record for going for the longest time without a recession.
The economy, however, is growing at the slowest pace since the global financial crisis a decade ago and retail sales in the year to September have suffered the biggest annual drop in 28 years, the Australian Bureau of Statistics revealed this week.
Australia is the world's second richest nation when it comes to individual wealth but that may not last. Swiss financial services giant Credit Suisse rates Australia as the world's most cashed-up nation after Switzerland, based on median per capita wealth (pictured is Australia's richest woman billionaire mining magnate Gina Rinehart)
House prices still falling across Australia nationally in June 2019
Richest countries in the world based on median individual wealth
Switzerland: $US227,891 ($A330,595)
Australia: $US181,361 ($A263,000)
Hong Kong*: $US146,900 ($A213,100)
Belgium: $US117,090 ($A169,640)
New Zealand: $US116,440 ($A168,726)
Japan: $US110,408 ($A159,985)
Canada: $US107,004 ($A155,052)
France: $US101,940 ($A147,730)
UK: $US97,452 ($A141,226)
Singapore: $US96,967 ($A140,539)
* Part of China
Source: Credit Suisse Global Wealth Report, 2019
Cash register activity fell 0.2 per cent, in real terms adjusted for inflation, marking the biggest decline since the June 1991 - when Australia was last in recession.
This occurred even though middle and average-income earners, on salaries of $48,000 to $90,000 a year, were entitled to new tax cuts of $1,080 as part of the government's pre-election Budget.
While Australia continues to be a prosperous nation, thanks to strong Chinese demand for raw commodities, it is a particularly unaffordable place to live.
Sydney is the world's third most expensive property market, after Hong Kong and Vancouver, when median house prices were compared with average household incomes, data from US think Demographia showed.
In fact, four Australian capital cities are among the world's 20 most unaffordable cities, with Melbourne coming in at No.4, putting it ahead of Los Angeles, San Francisco and London.
Adelaide came in at No. 14 while Brisbane made the list at No. 18, putting them ahead of even New York.
Retail sales in the year to September have suffered the biggest annual drop in 28 years. Cash register activity fell 0.2 per cent, in real terms adjusted for inflation, marking the biggest decline since the June 1991 - when Australia was last in recession (pictured is a David Jones store. The department store chain in August declared it was suffering a 'retail recession')
Credit ratings agency Moody's Investors Service expected Australia's housing affordability to worsen in 2020 as real estate values in Sydney and Melbourne recovered from a record slump that began in 2017.
'Affordability will deteriorate over 2020 as housing prices rebound,' it said.
Melbourne home prices rose by 2.3 per cent in October – the biggest monthly increase since November 2009, CoreLogic data showed.
Sydney home prices rose by 1.7 per cent for second successive month.
Many Australians clearly have wealth tied up in property.
Credit Suisse's Global Wealth Report for 2019 rates Australia as being the world's second richest nation after Switzerland based on the median wealth of adults.
Sydney is the world's third most expensive property market, after Hong Kong and Vancouver, when median house prices were compared with average salaries, data from US think Demographia showed (pictured is a house at Vaucluse in Sydney's eastern suburbs)
The typical Australian in the middle has assets worth $US181,360 ($A263,000) putting it behind Switzerland's $US227,890 ($A330,595) but ahead of Kong Kong $US146,900 ($A213,100).
Australia's tally of 1.18 millionaires makes up 2.6 per cent of the world's 46.8 millionaires despite comprising just 0.4 per cent of the world's adult population.
Some of the nation's billionaires from Gina Rinehart to Andrew Forrest make their money from mining iron ore, the raw material used to make steel.
Strong Chinese demand for this commodity helped Australia post a current account surplus during the June quarter for the first time since 1975.
This meant the value of exports was worth more than imports for the first time in 44 years, with the trade accounts in surplus by $5.9billion.
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