PARIS, Oct 17 (Reuters) - The combined wealth of all individuals has fallen this year for the first time since the financial crisis of 2007-08, with a drop in austerity-hit Europe outweighing a small increase in China, a Credit Suisse report has found.
The study found the wealth of all individuals - defined as assets such as income, real estate, savings and investments less debt - fell 5 percent in dollar terms to $223 trillion by mid-2012 from the same time the year before.
The main driver of the decline was Europe, where wealth fell 14 percent in dollar terms. But the study also attributed the fall to economic recessions in a broader range of countries, lower equity prices and relatively subdued housing markets.
Meanwhile, wealth in China grew 3 percent in dollar terms, the biggest winner this year, Credit Suisse said.
At constant exchange rates, global wealth rose 1 percent over the period, the smallest increase since the 2007-08 crisis.
The report published on Wednesday noted the European luxury goods sector had proven resilient, posting organic growth, which excludes acquisitions, at a high-teen percentage in the 12 months to June 30.
But Credit Suisse said it was cautious looking through to the second half of 2013, forecasting top-line growth would slow to 7-8 percent with "a high level of uncertainty and no visible prospects of growth acceleration until the second half of 2013."
It said a weak macroeconomic environment in Europe, rising taxation for the rich and wealth erosion should take its toll on luxury sales in the region, a trend which would be somewhat mitigated by tourist buyers from emerging markets.
It also predicted sales momentum in China - the luxury market's biggest driver of growth - should be impacted by an economic slowdown and a pullback on gift-giving, which would continue to weigh on luxury sales in China until a change in the country's leadership was complete.
China's ruling Communist Party is preparing for a once-in-a-decade leadership transition next month which could imply changes in the country's policies and economics.
The report comes after consultancy Bain on Monday forecast global luxury sales growth would drop to 5 percent at constant currencies this year from 13 percent last year.
Meanwhile, the latest trading update from LVMH, the world's biggest luxury group, showed a sequential slowdown in sales growth for the third quarter running as Chinese and Europeans cut spending.
The Credit Suisse report forecast total household wealth would increase by an average of 8 percent annually over the next five years, driven by emerging markets like China, Brazil, Malaysia, Russia or India.
Mean wealth per adult is projected to rise to $67,000 by 2017 from $48,500 in 2012.
Today, emerging market consumers account for around 50 percent of luxury sales for the big luxury names, a proportion that Credit Suisse expects to increase given the faster wealth creation in emerging markets.
China is expected to surpass Japan as the second-wealthiest country in the world by 2017 while the United States should maintain its leading position, the report said.
It also found the United States was still the largest individual luxury market in the world - except for watches - but relative to the aggregate wealth of the country, penetration of European luxury goods was lower than in other regions.
"Part of this is cultural, part is brand awareness and part is a long-term penetration opportunity for European luxury names," the report said.
Spending on luxury relative to wealth levels or number of millionaires remains much higher in Asia and to a lower extent in Europe and Japan, it said. (Editing by Mark Potter)
Our 2024 Coverage Needs You
It's Another Trump-Biden Showdown — And We Need Your Help
The Future Of Democracy Is At Stake
Our 2024 Coverage Needs You
Your Loyalty Means The World To Us
As Americans head to the polls in 2024, the very future of our country is at stake. At HuffPost, we believe that a free press is critical to creating well-informed voters. That's why our journalism is free for everyone, even though other newsrooms retreat behind expensive paywalls.
Our journalists will continue to cover the twists and turns during this historic presidential election. With your help, we'll bring you hard-hitting investigations, well-researched analysis and timely takes you can't find elsewhere. Reporting in this current political climate is a responsibility we do not take lightly, and we thank you for your support.
Contribute as little as $2 to keep our news free for all.
Can't afford to donate? Support HuffPost by creating a free account and log in while you read.
The 2024 election is heating up, and women's rights, health care, voting rights, and the very future of democracy are all at stake. Donald Trump will face Joe Biden in the most consequential vote of our time. And HuffPost will be there, covering every twist and turn. America's future hangs in the balance. Would you consider contributing to support our journalism and keep it free for all during this critical season?
HuffPost believes news should be accessible to everyone, regardless of their ability to pay for it. We rely on readers like you to help fund our work. Any contribution you can make — even as little as $2 — goes directly toward supporting the impactful journalism that we will continue to produce this year. Thank you for being part of our story.
Can't afford to donate? Support HuffPost by creating a free account and log in while you read.
It's official: Donald Trump will face Joe Biden this fall in the presidential election. As we face the most consequential presidential election of our time, HuffPost is committed to bringing you up-to-date, accurate news about the 2024 race. While other outlets have retreated behind paywalls, you can trust our news will stay free.
But we can't do it without your help. Reader funding is one of the key ways we support our newsroom. Would you consider making a donation to help fund our news during this critical time? Your contributions are vital to supporting a free press.
Contribute as little as $2 to keep our journalism free and accessible to all.
Can't afford to donate? Support HuffPost by creating a free account and log in while you read.
As Americans head to the polls in 2024, the very future of our country is at stake. At HuffPost, we believe that a free press is critical to creating well-informed voters. That's why our journalism is free for everyone, even though other newsrooms retreat behind expensive paywalls.
Our journalists will continue to cover the twists and turns during this historic presidential election. With your help, we'll bring you hard-hitting investigations, well-researched analysis and timely takes you can't find elsewhere. Reporting in this current political climate is a responsibility we do not take lightly, and we thank you for your support.
Contribute as little as $2 to keep our news free for all.
Can't afford to donate? Support HuffPost by creating a free account and log in while you read.
Dear HuffPost Reader
Thank you for your past contribution to HuffPost. We are sincerely grateful for readers like you who help us ensure that we can keep our journalism free for everyone.
The stakes are high this year, and our 2024 coverage could use continued support. Would you consider becoming a regular HuffPost contributor?
Dear HuffPost Reader
Thank you for your past contribution to HuffPost. We are sincerely grateful for readers like you who help us ensure that we can keep our journalism free for everyone.
The stakes are high this year, and our 2024 coverage could use continued support. If circumstances have changed since you last contributed, we hope you'll consider contributing to HuffPost once more.
Support HuffPostAlready contributed? Log in to hide these messages.