Australia’s number of super-rich people is rising — and they’re parking their money in luxury residential real estate, cars, art and wine, a new report reveals.
In Australia, the number of ultra-wealthy individuals — those with US$50 million or more in net assets — grew by 9 per cent in 2017, according to Knight Frank’s 2018 Australian Prime Residential Review.
There are now 1260 ultra-wealthy people in Australia — 5.2 for every 100,000 Australians — with a combined worth of US$269 billion.
The median wage for Australian workers is just over $55,000 a year, as The New Daily recently confirmed.
Australia’s reputation as a “lifestyle destination” saw it rank in the top five countries for ultra-wealthy people planning to buy luxury property in 2018, along with the United Kingdom, United States, Switzerland, and Canada.
Last year, the number of ultra-wealthy individuals worldwide grew by 10 per cent, taking the global population to 129,730.
According to the report, there is “ever-growing demand” from the global ultra-wealthy population to “move their money into ‘safe havens’ around the world”.
Cars, wine, art, and property: The super-rich post-GFC
Since the 2008 global financial crisis, the super-rich have been increasingly attracted to “tangible assets” such as property and luxury goods, according to Knight Frank Australia’s head of residential research Michelle Ciesielski.
“A shift from financial assets to tangible assets, such as cars, art and wine, has continued since the [GFC] … Prime residential property is very much a part of this story,” she said.
According to Knight Frank’s Attitudes Survey, 88 per cent of Australia’s ultra-wealthy believed their wealth increased in 2017 and 62 per cent believed their wealth was likely to continue to rise in 2018.
Australia’s leading luxury suburbs
Knight Frank defines prime property as “the most desirable and most expensive property in a given location”, generally the top five per cent of each market by value.
The report takes an in-depth look at the luxury real estate market in Sydney, Melbourne and Perth. Sydney sets the pace over the past 10 years, with total capital growth of 61.7 per cent.
In Sydney, number of residential property sales of $3 million and over increased each year since 2014, with a total of 1809 luxury property sales in 2017.
Sydney’s “best performing” suburb for luxury real estate in the first quarter of 2018 was Longueville, with a median price of $4.6 million and 117.7 per cent five-year capital growth.
In Melbourne, the number of sales for residential properties $3 million and over totalled 871 in 2017. Melbourne’s “best performing” suburb for luxury real estate was Hawthorn East with a median value of $2.3 million and 129.4 per cent capital growth over the past five years.
In Perth, Peppermint Grove was the “best performing” suburb for luxury real estate with a $3.1 million median price and 14.5 per cent capital growth over the past five years.