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How COVID-19 helped create 1.8 million Aussie millionaires

Aerial view of Melbourne suburb and Australian money being fanned out.
For many Aussies, household wealth went through the roof during COVID-19 lockdowns (Source: Getty)

How did the coronavirus lockdowns and the recession we experienced last year affected your household finances?

Have you applied for mortgage repayment holiday for your home or your investments?

Has the pandemic changed your strategy or approach to property investing?

These are only some of the COVID-19 related finance questions we recently asked over 1,700 Australian property investors and would be investors in our annual Property Investment Sentiment Survey conducted by Yahoo Finance and Michael Yardney’s Property Update, and some of the answers were enlightening.

Running since 2011, our survey offers insights into how property consumer trends and sentiments have changed over time.

The majority, or 57 per cent of respondents said there was no real change to the household finances, while 28 per cent said their household finances had improved.

This is no real surprise as despite COVID, lockdowns and a recession last year, recent Australian Bureau of Statistics (ABS) figures show the average Australian is getting richer.

How did the pandemic affect your finances.
Source: Provided

More Aussies join the millionaire club

The facts are in, and Australian total household wealth (net worth) rose by record $735 billion or 5.8 per cent to record a high of $13.4 trillion in the June quarter.

Despite all the challenges COVID has thrown at us wealth is up 19.7 per cent on a year ago – the strongest annual gain in over 11 years.

Average (per capita) household wealth rose by $27,782 or 5.6 per cent in the June quarter to a record high of $522,032 – up 20.3 per cent over the year.

In fact, Australian households have never been wealthier.

The twin effects of rising home prices and superannuation balances for propelled net household wealth and wealth per person to record highs.

A recent report by Credit Suisse estimates that as many as 1.8 million Aussies are considered to millionaires today, based on estimates of net household wealth.

And, the number of Australian millionaires is expected to grow to 3.1 million by 2025.

Aussie millionaires
Source: Provided

The Bottom Line

While we may all be in the same ocean, we are not in the same boat, and while some Australians have lost their jobs or are working shorter hours and have suffered financially, many Aussies are in at least as good a financial situation or better compared to when the pandemic began.

Sure 2021 will be a year many of us would rather forget, even though very few of us ever will.

So much has happened and so much has changed in our lives – well in some cases not much has really happened as we’ve been stuck at home.

However, for homeowners and property investors it will be a year when the value of their properties will have increased by up to 20 per cent - in some cases they will earn more from property capital growth than they will from their day job.

Click here to read the full survey results.

Michael Yardney is a director of Metropole Property Strategists, which creates wealth for its clients through independent, unbiased property advice and advocacy. He is a best-selling author, one of Australia's leading experts in wealth creation through property and writes the Property Update blog and hosts the popular Michael Yardney Podcast.

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