Have you ever wondered about the lifestyle of the affluent? Picture the opulent eight-bedroom estates, sleek Ferraris, designer handbags, and idyllic beachside retreats. Becoming part of Australia’s wealthiest 1% became a tad more attainable last year, as economic factors such as a weaker Aussie dollar and sluggish growth impacted the fortunes of the rich. Previously, aspiring members of Australia’s top 1% needed a net wealth of $US5.5 million ($8.41 million). However, according to a 2024 wealth report by global real estate consultancy Knight Frank, this threshold has dipped to US$4.67 million ($7.18 million). The report highlights a shift in Australia’s global ranking, now standing at seventh place for the requisite wealth to enter the top 1%. This marks a decline from its previous third-place standing. What Does It Take to Be Among Australia’s Wealthiest 1%? To crack into the elite echelons of Australia’s wealthiest 1%, one needs a net wealth of $US5.5 million ($8.3 million). Globally, this places Australia third, trailing behind Monaco ($US12.4 million) and Switzerland ($US6.6 million). Interestingly, owning a typical house in Vaucluse, where the median price hovers around $8.6 million, automatically catapults an individual into the ranks of the nation’s top 1%, provided there’s no mortgage involved. This indicates that possession of extravagant gadgets isn’t a prerequisite; property ownership alone can secure one’s status. The report unveils that affluent Australians typically possess around three residential properties, with the bulk of their wealth concentrated within the country. Commercial real estate and stock investments also feature prominently in their asset portfolios. Australia’s burgeoning wealth during the pandemic paints a staggering picture. In just two years, the country has nearly doubled its 2021 wealth figure, underscoring a scenario where the affluent continue to amass riches. Forecasts suggest a substantial surge in the number of high-net-worth individuals in Australia, defined as those with a net wealth exceeding $US1 million. This demographic is expected to grow by 71.1% between 2022 and 2027, reflecting a trend that surpasses the previous five-year period. Moreover, the number of ultra-high-net-worth individuals, boasting a net wealth surpassing $US30 million, is slated to swell by 40.9% over the next half-decade. Perceptions of Wealth among Australians: Contrastingly, the public’s perception of wealth diverges significantly from these eye-popping figures. According to a Dacxi survey, Aussies define wealth through three main lenses:
  1. Earning over $150,000 annually after taxes, as interpreted by two-in-five respondents.
  2. Accumulating a net worth exceeding $1 million, a definition embraced by more than one-in-three individuals.
  3. Owning a home outright, viewed as a marker of wealth by nearly a quarter of respondents.
Retirement savings also offer insights into wealth levels, albeit considerably lower than multimillion-dollar thresholds. The average super balances for individuals aged 60-64 hover around $360,000 for men and $289,000 for women. To retire comfortably at 65, a combined lump sum of $690,000 for couples and $595,000 for singles is deemed necessary—far from the realm of high-net-worth individuals, yet indicative of the savings accrued by most individuals upon reaching old age. Future Outlook: Knight Frank predicts continued global investment in real estate, albeit with a shift away from office and retail properties. Attitudes toward residential real estate investment in Australia remain positive, with Perth recording the highest residential price growth among Australian cities. As the Prime International Residential Index (PIRI 100) indicates, Perth sits at number 28 out of 100 global city, sun, and ski destinations, reflecting a promising outlook for real estate investments in the region. How can we help? If you have any questions or would like further information or you are seeking property tax advice, please feel free to contact our office via email –info@investplusaccounting.com.au or phone 02 9299 7000 to either speak with someone or arrange a time for a meeting so we can discuss your requirements in more detail. You can arrange a free 15 minute no obligation chat to discuss your options. Please arrange an appointment with our office by clicking here
General Advice Warning The material on this page and on this website has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained on this page and on this website is General Advice and does not take into account any person’s particular investment objectives, financial situation and particular needs. Before making an investment decision based on this advice you should consider, with or without the assistance of a securities adviser, whether it is appropriate to your particular investment needs, objectives and financial circumstances. In addition, the examples provided on this page and on this website are for illustrative purposes only. Although every effort has been made to verify the accuracy of the information contained on this page and on this website, Investment Plus Accounting Group, its officers, representatives, employees, and agents disclaim all liability [except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this website or any loss or damage suffered by any person directly or indirectly through relying on this information.