Declining property prices, which were brought about by the housing downturn and the weakening Australian dollar, have dragged down the average wealth per adult in Australia, according to a report by Credit Suisse Research Institute.

Over the past year, the average adult wealth has fallen from US$411,060 ($598,213) to US$386,060 ($561,831). Due to this, Australia lost around 124,000 millionaires in US-dollar terms over the past year.

The report also recorded a decline in median wealth in Australia — from US$191,453 ($278,333) to US$181,361 ($263,661).

Credit Suisse Australia chief investment officer Andrew McAuley said real estate prices and the depreciating value of the Australian dollar against the US dollar are behind the fall in median and average wealth.

“The report reveals the large proportion of wealth tied up in housing, emphasising the importance of real estate conditions to confidence and economic activity,” he told The Australian Financial Review.

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Non-financial assets, which include real estate, make up 58% of the gross assets and household wealth in Australia, compared to just 35% in the US, 39% in Japan, and 45% in Switzerland.

"The high level of real assets reflects a large endowment of land and natural resources relative to the population, but also high property prices in the largest cities,” McAuley said.

McAuley said the shrinking wealth appears to indicate the over-exposure of Australians to a single asset class.

"Between 2018 and 2019, the house-price decline of 6% in Australia is the only recorded instance of a drop of more than 2% among all the nations forming part of the report," he said.

Despite the fall in average wealth, the Credit Suisse report said Australia's wealth outlook remains "resilient".

Also read: Property Prices To Boost "Super-Rich" Population

In fact, two in three Australians possess wealth of at least US$100,000, the highest proportion in any country and roughly six times the world average.

Globally, around 1.3 million Australians are in the top 1% of global wealth holders, said Credit Suisse head of private banking Michael Marr.

"While the economic environment since the 2018 report has become more challenging in Australia, with sub-trend GDP growth and a weaker property market, the growth seen across investment markets has ensured Australia retained its consistently strong position as one of the wealthiest countries globally," he told AFR.