Savers in Germany are placing greater emphasis on securities – this has recently helped them build up their assets. But from Allianz’s perspective, there is still room for improvement.
Last year, German savers benefited from their greater openness to securities and increased their financial assets. However, inflation ate up a large part of the growth – and compared internationally, investment behavior in this country is still conservative, as Allianz economist Arne Holzhausen said at the presentation of the “Allianz Global Wealth Report”.
After a “certain period of apathy,” consumers have become more open, but the process is slow. “It’s like a big tanker that has to be moved.” Holzhausen also sees the reasons for this in the strong regulation of the securities business. Many consultants are not very inclined to sell such products. It is to be hoped that the future capital markets union will reduce over-regulation, says the economist.
Inflation-adjusted, only a meager increase in financial assets in Germany
Driven primarily by a strong increase of 14.7 percent in securities, the financial assets of German households increased by 6.8 percent to 7.953 trillion euros last year. The share of bank deposits in fresh savings fell from a total of 262 billion euros to just over a third (35 percent). According to Allianz, this was the lowest value ever – before the pandemic, it was regularly more than half. For the first time since the financial crisis, securities were also more popular than bank deposits.
With this increase, Germany did better than the countries of Western Europe, where the financial assets of private households only increased by an average of 5 percent. However, adjusted for inflation, the increase was only a meager 0.7 percent. In addition, purchasing power at the end of last year was still 1.7 percent below the pre-coronavirus year of 2019. “German savers have four lost years behind them,” concluded Allianz.
Germany ranks 18th among the 20 richest countries
With net financial assets per capita of 69,060 euros, Germany remained in 18th place of the 20 richest countries. By comparison, the USA, the richest country in the world, had net financial assets per capita of 260,320 euros, followed in second place by Switzerland with net financial assets per capita of 255,440 euros.
A few months ago, the German Federal Bank reported that people in Germany had accumulated record wealth last year despite the burden of high inflation. In addition to the price gains on the stock markets, the increased interest rates on savings accounts also contributed to this.
Medium-term outlook marked by uncertainty
Allianz spoke of a “surprising upturn” in global private financial assets last year. Thanks to the boom in the stock markets and robust economies, they rose by 7.6 percent to a record high of 239 trillion euros. Growth is likely to be somewhat weaker this year at 6.5 percent, Holzhausen expects. The medium-term outlook is overshadowed by uncertainties, above all the development of the two megatrends of artificial intelligence and sustainability.
Fears of loss of real estate value
In the future, savers worldwide and in Germany will also have to prepare for losses in value of real estate, which has already yielded less capital gains than stocks in the long term. The reason for this is climate change, which is having an increasingly strong impact on real estate assets. In Germany, for example, Allianz estimates that real estate prices will fall by up to a quarter (24.5 percent) by 2050, depending on the climate scenario, the insurer expects. “We have to make real estate fit for decarbonization” – this requires appropriate investments.
In its study, Allianz includes financial assets as cash and bank balances, claims against insurance companies and pension institutions, securities such as shares, bonds and investment funds, and other claims.
Source: Stern
