By Sarah Brookes and Craig Butt
The top 1 per cent of income earners in a ring of Perth waterside suburbs take home more than $2 million a year on average, while in another dozen neighbourhoods across the city the best-paid 1 per cent make more than $1 million.
Analysis of official personal income data by this masthead has revealed a cluster of ultra-high earners in Perth’s wealthy western suburbs. Topping the list was Cottesloe where the highest paid 1 per cent had an average annual income of $16.1 million, the highest in Australia.
The 1 per cent in the adjacent neighbourhood of Mosman Park-Peppermint Grove was next with an average annual income of $4.3 million. Third was the 1 per cent living in Nedlands-Dalkeith-Crawley with $3.9 million.
Across the whole of Greater Perth, the average income of the top 1 per cent was $811,000 in 2021-22. That compares with an average annual income for all earners in the city of $79,500; the median income (the middle value of all earners) was $60,360.
The analysis used Australian Bureau of Statistics personal income figures, which draws on Tax Office records for the 2021-22 financial year, the most recent available. The data only covers individual pre-tax income; it does not include assets owned by individuals such as housing and shares.
Suburbs where the top 1 per cent have especially high incomes correlate closely with house prices.
Cottesloe had the city’s second-highest median house price of $3.2 million in Domain’s latest House Price Report. The Dalkeith area, which was second on the 1 per cent income list, had the highest median house price at $3.3 million.
While suburbs with the highest average incomes for the top 1 per cent were mostly near the Swan River and along the coast, one was located in the Perth Hills with Gidgegannup sitting at $1.3 million.
Strategic Property Group managing director Trent Fleskens said the figures showed just how concentrated wealth was in the western suburbs and added high incomes in these pockets were subsequently driving up local property prices.
“When the top 1 per cent in Cottesloe are earning $16 million a year, it’s no surprise the area has some of Australia’s most expensive homes,” he said.
“While Perth’s top earners are doing incredibly well, the reality for most people is very different.
“With the median income sitting at just over $60,000, the gap between the average West Australian and the elite is getting wider, making homeownership in these suburbs completely unreachable for most families.”
Fleskens said the data highlighted the need for more targeted government support for affordable and social housing.
“The free market will always cater to those at the top, but without intervention, the rest of Perth risks being priced out as demand continues to outstrip supply in our most desirable areas,” he said.
KPMG urban economist Terry Rawnsley said super-wealthy suburbs may not impact social mobility, but increasing house prices in middle-ring suburbs could create barriers for labour market mobility which in turn creates wealth barriers.
“We don’t want a situation where the only affordable housing is in greenfield areas far from the CBD or small inner-city apartments,” he said.
He added the cluster of high-income earners in the prestigious western suburbs followed similar patterns to those on the east coast, however the oceanfront suburbs in the west offered more space to spread out compared to the harbourside suburbs in Sydney or the inner eastern suburbs of Melbourne.
“In the case of Perth, no doubt the mining industry would be having an impact on the distribution on the high-income households but also a range of business owners from a range of other sectors would also be in the top 1 per cent,” he said.
“Many successful business owners in Perth who earn substantial incomes are naturally attracted to properties with ocean views.
“This trend increases house prices, prompting further investment in homes in these locations, which in turn raises their value. These types of locations almost become detached from the factors that drive the broader housing market in Perth.”
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