How much money do you need to be in Australia’s wealthiest 1 per cent?

The amount of money it takes to make it into the top 1 per cent of the wealthiest Australians has doubled to $8.25 million since 2021, according to a new report.

The increase means the amount of money you need to be part of Australia’s top echelon of wealth ($US5.5 million) is now the third highest among the countries and territories covered by global property consultancy Knight Frank’s Wealth Report 2023, behind Monaco at $US12.4 million and Switzerland at $US6.6 million.

High-end property is the driving force behind Australia’s wealthyCredit: Anna Kucera

New Zealand is in fourth at $US5.2 million; the US sits in fifth at with $US5.1 million.

In 2021, Australia was ranked lower at No.7 ($US2.8m).

The bulk of this two-year increase has been due to rising property prices, according to Michelle Ciesielski, Knight Frank’s head of residential research Australia.

“A large contributor to the top 1 per cent wealth level doubling in Australia over the past two years has been prime residential property performance, recording an upward trajectory,” she says.

Upper-end property prices have been resilient despite the rising costs of finance, as “49 per cent of this cohort tend to be cash buyers,” Ciesielski says.

Of the 100 prime markets tracked by Knight Frank around the world, 85 recorded positive or flat price growth in 2022.

The level of wealth required to reach the top 1 per cent varies extensively depending on where you live in the world, but it has risen across the board since Knight Frank last published the analysis in its Wealth Report 2021.

This year’s report also forecast significant growth for Australia’s wealthy populations over the next five years.

It found the number of “high-net-worth individuals” – defined as those with a net wealth of more than $US1 million – was set to grow by 71.1 per cent between 2022 and 2027 in Australia: from 2,214,326 in 2022 to 3,789,629 in 2027.

This forecast level of growth in the number of high-net-worth individuals in Australia is 2.5 times the previous five-year period of 2017 to 2022.

The number of “ultra-high-net-worth individuals” in Australia – those with a net wealth of more than $US30 million – is set to grow by 40.9 per cent over the next five years: from 17,456 in 2022 to 24,589 in 2027.

The report follows the release, last year, of Credit Suisse’s annual Global Wealth Report, which found Australians to be the wealthiest people in the world, with a typical net worth of almost $US274,000 in 2021, just ahead of Belgium, New Zealand and Hong Kong.

Australia had about 2.2 million millionaires, calculated in US dollars, in 2021, up from 1.8 million millionaires in 2020, with rising property prices the main reason behind the increase.

Net worth or “wealth” is defined by Credit Suisse as the value of financial assets plus real estate, including the family home, and includes retirement savings – from which debts are subtracted.

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