About 10,000 mega rich make
Australia home in 2017, lured by proximity to Asia and no inheritance taxes
Australia is the millionaires’ migration destination of choice for the third year running, according to a new report, with wealthy individuals lured by the country’s proximity to Asia, relative safety and no inheritance taxes.
About 10,000 high-net-worth individuals, with a personal wealth of US$1m or more, migrated to Australia in 2017 – mostly from China, India and the UK.
Melbourne and Sydney were among the top 10 cities around the world to have a net immigration of millionaires, as was Auckland in New Zealand. Sydney is one of the wealthiest cities worldwide.
It is part of a growing global movement of millionaires who, according to the 2018 Global Wealth Migration Review published by the AfrAsia Bank this month, are the canaries in the coalmine of economic collapse.
The number of millionaires swapping countries increased by 15% in 2017, to 95,000.
Countries that recorded a net deficit of millionaires – including the UK, which suffered a net loss of 4,000 millionaires in 2017 – should view it as a bad sign, according to the authors.
“If one looks at any major country collapse in history, it is normally preceded by a migration of wealthy people away from that country,” the report said.
Australia is a popular destination because it is safe, politically stable and, importantly, does not have any inheritance taxes. The proximity to Asia also makes Australia a good base for doing business in China and Japan.
It was ranked as the safest country in the world for women by the review in 2018 – a metric, the report says, historically has a 92% correlation to growth in wealth.
The report does note, in parentheses, that some of the super wealthy view Australia as “a nanny state with too many rules”.
It says arguments against immigration do not apply to the very rich, who are “unlikely to take low-paying jobs … unlikely to claim benefits ... [and likely to] send their children to private schools”.
The “only possible negative”, the report says, are increased property prices.
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It commends Australian laws preventing foreign investors from buying second-hand homes as a safeguard against property price hikes, although house prices in Sydney and Melbourne nonetheless increased in 2017.
The report said the cost per square metre of property in Sydney rose by 19% in 2017 to US$25,000 ($32,600) per square metre, making it more expensive than traditional playgrounds for the mega rich like Lake Como in Italy. The Sydney housing market has cooled slightly in 2018.
Australia is ranked the ninth-wealthiest country in the world, with a private wealth of US$6.142tn, but is forecast to overtake Canada and France to be the seventh-wealthiest country by 2027.
It is the fifth-wealthiest country per capita, with an average personal wealth of US$279,200, overtaking the US, where the average wealth is US$193,400. Both figures are skewed by supremely wealthy individuals at the top of the scale, but the report says Australia is one of the “most equal” countries in the world, with 28% of the total personal wealth in the country held by individuals with a personal wealth of US$1m or more.
The ratio should be less than 30%, the report argues. Anything above 40% leaves “very little space for a meaningful middle class”.
There were 2,252 billionaires in the world in 2017, 584,000 multi-millionaires with a net-worth of US$10m or higher, and 15.2 million millionaires. The average global personal wealth was US$28,400.
Research conducted by the UK parliament last month projected that the richest 1% would control two-thirds of the world’s wealth by 2030.