‘2021 was a good year for those lucky enough to be the owners of property or other tangible assets,’ according to property consultants Knight Frank | Source: Dan Kitwood/Getty Images

Super-Rich: Another 52,000 People Join the Ultra-Wealthy Elite

Over the next five years, the net worth of Australia’s “ultra-wealthy” is set to surpass $1.1 trillion, according to Knight Frank’s latest Wealth Report.

In the face of the ongoing pandemic, the report revealed that Australia’s ultra-high-net-worth-individuals (UHNWI) actually prospered in 2021, accumulating A$863 billion in wealth and growing by more than 10 per cent in population size.

Globally, a further 52,000 people increased their wealth to become classified as UHNWIs.

Knight Frank Australia’s Head of Residential Research, Michelle Ciesielski, said their wealth model predicts that Australia’s billionaire population will grow by a further 37 per cent over the coming five years. In short, the accumulating net worth of the world’s ultra-wealthy is showing no signs of slowing.

We predict that 2022 will be a record year for global cross-border investment when investors will have the opportunity to rebalance portfolios, execute business plans and implement strategic goals.

Ben Burston, Knight Frank Australia Chief Economist

But with the country’s one per cent growth in wealth and size, what are Australia’s ultra-wealthy investing in? And what is driving their increasing wealth?

Well, according to the report’s findings, property remains at the top of the list, continuing to offer a “cornerstone of wealth” for Australia’s super-rich.

On average, 37 per cent of Australian UHNWI’s investable wealth is allocated directly to commercial property. This investment has traditionally flowed largely into the major sectors – offices, retail and industrial – but private investors are increasingly seeking diversification into emerging sectors such as healthcare, data centres and agricultural land.

Ben Burston, Knight Frank Australia Chief Economist

Mr Burston also said eco-investing, inflation and asset rotation are likely to be the key driving factors in commercial property investment in 2022.

In addition to real estate, the emerging investment class of crypto assets, encapsulating cryptocurrencies and NFTs, has played a significant role in UHNWI’s investment portfolios, with 16 per cent of Australia’s ultra-wealthy investing in NFTs.

Record-breaking sales volumes at major global auction houses also pointed to the growth intangible investments in the booming luxury collectibles space. From coloured diamonds and art to designer handbags and sports cars, UHNWIs continued to invest in luxury goods with profit potential. Leading the way was fine wine and watches, rising by 16 per cent in 2021, according to Knight Frank’s Luxury Investment Index.

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