Article Source: The Australian Financial Review – Oct 2, 2019 – Nila Sweeney
The number of ultra-wealthy Australians are forecast to swell by 20 per cent over the next five years, fuelling demand for prime real estate, a Knight Frank report showed.
Despite the slowing economy, very rich individuals are piling on their fortunes at such a rate that 613 will join the ranks of Australians with a net worth of over US$30 million ($44.73 million) by 2023.
This will take the total to 3675 ultra high net worth individuals (UHNWI) to 3675. Sydney will retain its position as the most desirable city for the ultra-rich, taking the lion share of 1054 people while Melbourne will host 626 and Perth have 385.
The Knight Frank Wealth Trend report has also predicted an 18 per cent increase in the number of people with a net worth of over US$1 million ($1.49 million) to 389,300 over the same period.
Australia’s billionaire population is projected to grow by a further 14 per cent to 49 with Sydney hosting 11 of these individuals.
More than a third (35 per cent) of the total wealth of Australia’s super-rich is derived from residential property. Each owns, on average, three residential homes.
By the end of 2019, one in six of the super-rich is likely to have bought a second or third home in Australia.
Knight Frank head of research Michelle Ciesielski said that strong population growth in the ultra-wealthy and millionaire segments and their buying intentions will continue to fuel demand for prime real estate around the country.
“The ultra-rich are not necessarily just looking for one home to live in, they tend to have the main family home, the city pad and country estate,” she said.
Tech billionaire Mike Cannon-Brookes who already own Australia’s most expensive home, has recently splurged $14.5 million on 155-hectare farm in the Southern Highland.
Looking ahead, Ms Ciesielski said that the prime market is poised to see a healthy, sustainable growth despite the global economic headwinds that could potentially impact business confidence.
“We think the prestige market still has further growth to be had. There remains a buoyancy in the local prime market indicators,” she said.
Knight Frank is forecasting a 2 per cent rise in Sydney’s prime residential price by the end 2019, with a potential to add 3 per cent in 2020.
Melbourne is expected to grow by 1 per cent while Brisbane is set to grow by 3 per cent over the course of 2019.