by James Kirby for The Australian - 21.06.23
Australia has regained its spot as the number one destination in the world for high net worth individuals with more than US$1m ($1.47m) to invest, after beating the United Arab Emirates which held the prize during the height of the Covid-19 pandemic.
The benchmark Henley Private Wealth Migration report for 2023 suggests an elite group of immigrants could pump more than $7bn into Australia
But the trend will further fuel property price increases in the metropolitan centres, widening the gap with the rest of the national market.
Ray White chief economist Nerida Conisbee says: “Premium suburbs are now leading the recovery in prices. This is perhaps in part due to high levels of wealth entering the country.”
The UK-based Henley survey suggests the source of Australia’s richest immigrants is widening beyond China and India to include the UK where a post-Brexit debate about the tax privileges of “non-doms” is adding to what has been described as the “millionaire drain”.
According to the report, “Australia is expected to attract the highest net inflow of high-net-worth individuals in 2023.
This large influx of the world’s wealthiest is nothing new. Australia consistently attracts sizeable numbers of millionaires every year, mainly from Asia and Africa, but more recently also from high-income countries such as the UK.”
Importantly, the report is not an examination of business migrants; rather the survey concentrates on those “who have truly moved, namely who stay in their new country for more than six months a year”.
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Approximately 82,000 high-net-worth individuals have moved to Australia over the past 20 years (2002 to 2022) and 5200 are due to arrive this year.
Across the wider market, property industry analysts are suggesting that the influx of 400,000 new arrivals – many of them students – will keep the property market moving higher even if there is a recession.
House prices have now managed to increase three months in a row despite widespread forecasts in recent times that the market was heading for a decline.
More recently the nation’s biggest bank, Commonwealth Bank, has recast its forecasts predicting that national average prices will rise 3 per cent this year and 5 per cent next year.
But the general forecasts may not offer a clear picture of the market, where outer suburban prices have barely moved as inner city up-market areas have managed outsized gains.
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Conisbee suggests that very wealthy arrivals in Australia may now start to expand their property searches beyond the traditional targets of Sydney and Melbourne.
“If you are looking at an international property buyer who is not sensitive to interest rates and, for example, they have been looking at London prices and then they are assessing value in Queensland, they may well view it as a bargain,” she says.
She cites the waterside suburb of New Farm in Brisbane, which witnessed the biggest jump in its median price of any capital city suburb. New Farm prices lifted from $2.24m to $2.9m over the past 12 months.
According to Conisbee: “Queensland is on track this year to see more international migrants arriving than ever before.”
According to the Henley report, Australia’s attractions include political stability and a good school education system.
The report also points to Australia’s business innovation and investment program as a factor for the popularity of the local market, although on comparable measures Australia does not compete strongly with rival nations for wealthy migrants.
The lead spot here is taken by the Portugal Golden Residence Program, which topped a global survey on investment migration programs. Australia’s ranks eighth in tandem with Singapore.
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Wealth Editor
Sydney
James Kirby, The Australian's Wealth Editor, is one of Australia's most experienced financial journalists. He is a former managing editor and co-founder of Business Spectator and Eureka Report and has previously worked at the Australian Financial Review and the South China Morning Post. He is a regular commentator on radio and television, he is the author of several business biographies and has served on the Walkley Awards Advisory Board. James hosts The Australian's Money Cafe podcast.
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