Sydney joins the top 10 hit list for super rich Chinese
12 Mar 2016
Accelerating growth in real estate, as well as IT, healthcare and pharmaceuticals drove the number of ultra-high-net worth individuals living in Australia up by 135 per cent in the 10 years to 2015.
The Knight Frank Wealth Report 2016 said Sydney rocketed on to the top 10 list of global cities most important to ultra-high-net worth individuals for the first time, with this elite group of wealthy defined as individuals with a net worth of more than $US30 million ($41.5m) excluding their primary residence.
Sydney shot up from 14th position to eighth position behind London, Singapore, and Shanghai. But the rate of growth, particularly in Australia for ultra-high-net worth individuals is unsustainable.
“This level of growth in numbers of UHNWIs in Australia is anticipated to slow over the next decade to 35 per cent, and we have already seen a slowdown of 2 per cent during 2015,” Knight Frank Australia chief executive Stephen Ellis said yesterday. “In Australia, the biggest concerns UHNWIs have in regard to wealth creation and preservation over the next 10 years include stock market volatility, the global economy, and the issues that come with succession and inheritance.”
Despite the expected slow down, he said wealthy investors were more mobile than ever and investment flows were targeting new markets such as Australia.
“Our analysis of cross-border capital flows confirms the rapid growth of investment activity and also the scale of movements between key countries, with strong growth in outflows from China reflecting the growth from wider Asia,” he said.
Australia is expected to make up 6 per cent of the 73,000 UHNWIs in the Asia-Pacific region in 2025.
Australia presently makes up 7 per cent of the 45,000 UHNWIs in the region.
Knight Frank head of research, Australia, Matt Whitby, said of the 19 countries tracked within the Asia-Pacific, 12 saw their UHNWI populations fall last year, because of global macro-economic events such as the Chinese slowdown, oil price falls, volatile equity markets and the strength of the US dollar.
“Asia especially has been fertile ground for the growth in the number of UHNWIs, with more individuals surpassing the $US30m barrier than in any other region over the past 10 years,” Mr Whitby said.
The report estimates there are 842 UHNWIs living in Sydney, 588 in Melbourne, 290 in Perth and 208 in Brisbane.
In contrast, there are 2360 UHNWIs in Singapore, 4905 in London and 5600 in New York.
“Competitive prices, compared with Australia’s top cities, plus strong fundamentals — local population growth and expanding tourism — underpin demand along the 57km coastline,” the report said.
Sydney’s population of multi-millionaires with $US10m or more fluctuates wildly, with December attracting 5050 individuals while in July the number evaporated to 2210.