Spotlight on Diaspora Wealth
Pre-amble:
Immigrants, particularly the African diaspora are often viewed as a distinct entity - separate from the native population. This is a mistake, particularly, as they have become more educated and more financially established in their chosen countries. Today's report, therefore, views the diaspora in the same context.
Lockdown Savings A report in this morning's Financial Times says that the UK household savings ratio rose to nearly 20% in the first quarter of this year due to the lockdown, This is a rise from 16.1% seen in the previous quarter.
According to KPMG, UK households are sitting on additional savings of £140 billion pounds - directly attributed to the lockdown. This equates to about £5,000 per household.
Comparative statistics for other countries are Canada CAD17,408; and Germany EUR4,450. New Zealand and Australia have not had lockdowns of the same magnitude as most other developed economies; so the picture on personal finances in those countries is less clear.
UK House Prices
The latest UK House Price Index, published by the Nationwide Building Society shows that house prices have risen by the 13.4% over the past year. The fastest pace for 17 years.
This latest rise takes the average UK house price to £245,432. Considering that for the vast majority of people, their home is their single biggest asset, it means that the average British home owner is £29,082 wealthier than they were a year ago.
Canadian House Prices
House price growth in Canada has been explosive and prices have risen at their fastest rate for 30 years. Year-on-year, Canadian house prices have risen a whopping 31% - taking the average house price to CAD 715,000. This has made the average home owner CAD169,198 richer in over the past year.
New Zealand House Prices
Median house prices across New Zealand rose 32.3% from $620,000 to $820,000 compared to this time last year. So the median household in New Zealand is sitting on NZD200,000 more today than it did a year ago.
Interest Rates & Inflation
Finally, interest rates are at all-time lows in every single developed country. They range from 0.25% in USA, Canada and New Zealand; to negative interest rates of -0.75% in Switzerland. While there are concerns around inflation due to rising commodity prices, central banks remain reluctant to raise interest rates.
Some of this reluctance is certainly justified by the economic fundamentals, which show that countries like the UK, for example, are still behind their pre-pandemic growth trend and unemployment is also higher than before the pandemic. This is why some analysts are forecasting interest rates to remain at current ultra-low levels until 2023 - at the earliest.
At Heritage Pay, we specialise in high value money transfers to emerging markets. We are particularly suited to helping individuals buying property abroad; importers paying foreign suppliers; and investors to other countries. So to discuss how the above may affect your money transfer requirements, please contact your Currency Dealer at Heritage Pay on: +44 (0) 207 117 2934 - free on WhatsApp.
None of the information in this article is, nor should be construed as, financial advice. All foreign exchange transactions involve risk and you should always seek your own independent financial advice before entering into any foreign exchange transaction.
