North American households have overtaken those in Asia-Pacific and Europe as the wealthiest for the first time since 2005 boosted by a recovery in U.S. house prices and an equity market rally, Credit Suisse Group AG (CSGN) said.
A recovery in the world’s largest economy fueled a fifth consecutive year of wealth growth in North America, rising 12 percent in the 12 months to mid 2013 to $78.9 trillion. The Asia-Pacific region suffered from a 20.5 percent fall in Japan’s wealth as that country flooded its economy with cash, weakening the yen, Credit Suisse said in its global wealth report. Wealth in Asia-Pacific fell 3.7 percent to $73.9 billion, the Zurich-based bank said.
Extraordinary monetary stimulus has helped propel the U.S. economy by an annualized rate of 2.5 percent in the second quarter, faster than the previous three months, government data showed Sept. 26. With U.S. house prices rising 7 percent during the 12 months to mid 2013, households there are now 54 percent more wealthy than they were during a recent low in 2008, Credit Suisse said.
In the U.S., “wealth per adult has fully recovered, and is now 10 percent above the 2006 level,” the report said. “The forthcoming reduction in monetary stimulus announced by the Federal Reserve raises doubts about whether the recovery will continue, but the signs are positive for household wealth in the immediate future.”
The wealth of European households climbed 7.7 percent to $76.3 trillion, while wealth worldwide increased by 4.9 percent to $241 trillion, according to the report.
Global wealth will rise by 39 percent to $334 trillion over the next five years, Credit Suisse said, with 29 percent of the projected growth expected from emerging markets. Asia-Pacific region will see a 75 percent increase in millionaires over the next five years to 11.5 million in 2018 with China seeing an 88 percent rise, it said.
The U.S. is expected to have the highest aggregate wealth of about $100 trillion by 2018 and China will overtake Japan as the second wealthiest economy in 2016, Credit Suisse said.
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