The number of ultra-high-net-worth individuals (UNHWIs) in Australia has reached record levels, with 16% of their wealth allocated to ‘investments of passion’ and higher engagement in philanthropic activities compared to global counterparts.
According to Knight Frank’s The Wealth Report 2022, Australia’s growing population of UHNWIs increased by 10.1% in 2021 to 20,874 people, compared to 9.3% globally.
Following this, the spending patterns of the UHNWIs were motivated by their passion rather than simply return on investment, which meant 16% of the allocations of their investable wealth was driven by passion.
Also, the report found that spending on these investments of passion increased for 51% of Australian UHNWIs, with wine, watches and art the best performing in 2021, causing passion investments to see the strongest annual performance globally since 2018.
Australia’s UHNWIs were also choosing to give back more than the previous year, with 57% of Australia’s ultra-wealthy increasing their philanthropic activities compared to only 37% of the rest of the world.
What is more, at the end of 2021, Australia’s most desirable and expensive property (generally considered the top 5% of each market by value) experienced significant growth due to the reopening of borders and the return of investors and the growing appetite amongst domestic buyers for second homes on Australian soil.
Consequentially, the Australian Prime Residential index rose by 12% ahead of the Knight Frank Luxury Investment index at 9%.
During this time, combining prime property and luxury investments, Gold Coast prime property performed the strongest with 17% growth, followed by 16% annual growth in Sydney prime property, wine then watches.
“Australia’s UHNWIs are certainly becoming more interested in causes concerning healthcare and disease prevention, conservation, social issues and the arts.
“The greater increase in philanthropic giving, in comparison to the increase in spending on investments of passion, reinforces a growing a commitment to ESG investments as UHNWIs seek long term value and alignment with sustainability and climate-related objectives,” Knight Frank Australia’s head of residential research, Michelle Ciesielski, concluded.
