The equivalent of an extra 1,085 people in Australia will be considered ultra-wealthy in the next five years, according to Knight Frank's Wealth Report 2020.
The data from Knight Frank's Wealth Report 2020 shows Australia’s ultra-high-net-worth-individual (UHNWI*) population will rise to 4,881 by 2024, up from 3,796 in 2019, with more than 200 new ultra-wealthy people being created in Australia each year.
Australia’s ultra-wealthy population grew by 5 per cent in 2019 and by 35 per cent over the past five years.
At the same time, Australia’s high-net-worth-individuals (HNWI**) are expected to grow by 34% over the next five years to reach close to 2.1 million.
Currently, 50 million people globally are considered millionaires, with wealth of US$1 million or more.
At a Glance:
According to Knight Frank’s Head of Residential Research, Australia Michelle Ciesielski, Australia is forecast to have one of the highest rates of growth in UHNWI populations globally over the next five years.
“Australia is ranked equal 15th with Canada for the projected growth in UHNWIs out of 43 countries globally,” said Ms Ciesielski.
Source: Knight Frank Wealth Report“Our projections are based on The Knight Frank Wealth Sizing Model which allows us to project the number of individuals in each wealth band in the future.
"We have utilised data including forecast growth in GDP, house prices, equity performance, interest rates and other assets that individuals hold.
“Coming off a number of years of solid growth in Australia, 2019 saw further wealth creation off the back of a resilient stock market and further capital gains in the prime property market.
Ms Ciesielski said while challenges in the local economy persist, there has been much more certainty and solidifying of the global economy coming into 2020.
"The Knight Frank Wealth Report 2020 includes an Attitudes Survey on the ultra-wealthy population (those with wealth of US$30m or more)," said Ms Ciesielski to WILLIAMS MEDIA.
"When analysing the current allocation of assets of the Australian ultra-wealthy population, about one-third is invested in property as an investment (not their first and second homes), one-third is invested in equities and the remainder is invested in bonds, cash, private equity, collectables, gold and crypto-currencies.
Michelle Ciesielski, Knight Frank’s Head of Residential Research, Australia. Photo: Knight Frank
Ms Ciesielski said when asked of philanthropic causes, Australian ultra-wealthy clients said they were becoming more interested in healthcare (including disease prevention), education, conservation (including the environment), the arts, climate change and diversity (including social inclusion).
Knight Frank’s Joint National Head of Private Office Sarah Harding said on average 80 per cent of Australian UHNWIs saw an increase in wealth in 2019, well above the global average response of 63% in the Knight Frank Attitudes Survey.
“Looking ahead to 2020, 63 per cent of Australian UHNWIs believe their wealth portfolios will continue to grow, which is optimistic when compared to the global average of 55 per cent," said Ms Harding.
Source: Knight Frank
“Australian UHNWIs cite the top three issues challenging wealth creation in 2020 as being the flow on from the global economic slowdown, negative interest rates or bond returns and the global trade wars.
“As a result, 92 per cent of Australian ultra-wealthy population are making changes to protect their wealth.”
According to Ms Ciesielski, the number of ultra-wealthy people around the world is predicted to grow by 27 per cent over the next five years, with the population rising by 136,087 to just under 650,000.
"An additional 31,000 UNHWI were created in 2019, an increase of 6.1 per cent," said Ms Ciesielski.
“Out of the top 20 fastest growing countries presented in the report, six are located in Asia, with India forecast to have the highest growth of 73 per cent.
“We expect Asia will be the world’s second largest wealth hub by 2024, with a forecast five-year growth of 44 per cent, but it will still be only half the size of North America’s ultra-wealthy population, which is forecast to increase by 22 per cent.”
Ms Ciesielski told WILLIAMS MEDIA that their Knight Frank Wealth Sizing Model allows them to project the number of high-net-worth individuals (millionaires), ultra-high-net-worth individuals (ultra wealthy) and billionaire population over the next five years.
"We look at the predicted growth in GDP, house prices, equity performance, interest rates and other assets that individuals hold," said Ms Ciesielski.
"Looking at the Australian wealthy population, the millionaire cohort is expected to result in the strongest growth with 34 per cent over the next five years.
'Australia is ranked 15th highest in the world for the projected five year growth in the millionaire population.
"This means there will be over 522,000 more people with wealth of more than US$1 million by 2024, taking the total to 2.1 millionaires in Australia."
To see more of Knight Frank's Wealth Report 2020 click here
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