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Australia’s ultra wealthy now worth over $863bn
Ultra wealthy Aussies are expected to become hundreds of millions of dollars richer over the next five years.
Australia’s ultra wealthy now worth over $863bn
Ultra wealthy Aussies are expected to become hundreds of millions of dollars richer over the next five years.
The number of Aussies awarded the ‘ultra wealthy’ title increased by 10 per cent in 2021 with a combined net worth of over $863 billion, according to Knight Frank.
The increase in ultra-high-net-worth individuals (UHNWIs) in Australia was greater than the global average of 9.3 per cent, with strong growth expected to continue in the future.
Knight Frank predicted that Australia’s UHNWI population would grow by 31 per cent during the next five years to a total of 27,330 people with a combined wealth of $1.1 trillion.
Over the past five years, the number of UHNWIs in Australia surged by 124 per cent, above the global average of 75 per cent, with a total population of 20,874 in 2021.
“It’s extraordinary to see such momentum in the growth of our UHNW sector in an economy and population of Australia’s size,” said Knight Frank head of Australian residential research Michelle Ciesielski.
Knight Frank said that access to technology and the “digital democratisation of investments” had seen wealth creation and growth reach new heights.
The appreciation of assets including property, stocks and luxury collectibles were all found to have contributed to the growth wealth during the past year.
“The onset of the COVID-19 pandemic in 2020 led to an unprecedented amassing of savings across Australia’s population, which enabled significant investment upside over the last 12 months,” said Knight Frank Australia chief economist Ben Burston.
“We predict that 2022 will be a record year for global cross-border investment, when investors will have the opportunity to rebalance portfolios, execute business plans and implement strategic goals.”
Australia’s UHNWIs remained overwhelmingly positive on the outlook for their investments, with 91 per cent predicting that their wealth will increase during 2022.
They identified capital preservation as the top priority of their investment strategies, followed by capital appreciation, income generation and impact investing.
Supply chain issues were seen as the top threat to the creation and preservation of wealth by UHNWIs followed by the emergence of new variants of COVID-19.
Knight Frank found that nearly two-thirds of the wealth of UHNWIs was being held in property.
“Real estate remains a cornerstone of many UHNWI investment portfolios, occupying a unique position somewhere between bonds and equities where it enjoys the upside of rising rents and values in times of economic expansion, but also security during times of volatility,” said Mr Burston.
“It’s likely that we will see eco-investing, inflation and asset rotation as the key investment drivers for commercial property investment this year.”
Cryptoassets and non-fungible tokens (NFTs) have also emerged as a potential investment for more UHNWIs, particularly in Australia.
Last year, 27 per cent of Australian UHNWIs invested in crypto and 16 per cent invested in NFTs, against a global average of 18 per cent and 11 per cent, respectively.
Individuals included in the ultra wealthy category have net holdings of US$30 million plus.
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