Revealed: What Australia's wealthiest are investing in

Australia is now home to more high-net-worth individuals than the likes of Italy, South Korea and Spain, the 2025 Wealth Report produced by Knight Frank has revealed.

More than 40,000 Australians have at least US$10 million in assets (roughly $16 million Australian dollars), meaning Australia has the ninth-highest population of high-net-worth individuals in the world.

Knight Frank found that the number of people in Australasia (which includes Australia and New Zealand) with a net worth greater than US$10 million grew by 3.9% over the course of 2024.

This uptick was, according to Knight Frank Australia's chief economist Ben Burston, partly helped by the impact falling rates had on equity markets and, in turn, a positive flow-on to investor portfolios.

"While several major economies, including Australia, saw sluggish growth in 2024 as higher interest rates took a toll on household incomes, robust growth in the United States supported the global economy and underpinned ongoing wealth creation.

"Moves by major central banks to reduce interest rates have also buoyed investor confidence and supported a strong rally in equity markets, resulting in rising numbers of HNWIs globally and in Australia."

At the same time as the number of wealthy Australians has grown, there's evidence to suggest that the country's wealth disparity has widened.

A report published by the Australia Institute earlier in the year highlighted that a significant proportion of the total household wealth created in the country this century has gone to richer Australians.

The research found that between 2002 and 2022, more than half of the increase in net worth in Australia went to the wealthiest 20%, while just 10% went to the poorest half of Australians.

What are wealthy people investing in?

As part of its research, Knight Frank surveyed 150 family offices across the world in the final two months of 2024 to get a sense of where wealthy individuals and families are investing their money.

The top five asset classes by portfolio share were equities, cash, direct real estate, private equity and fixed income, though other categories of note include art and collectibles (ranked ninth) and cryptocurrency and digital assets (ranked 12th).

Knight Frank also found that there is an appetite among high-net-worth Australians to increase their commercial real estate holdings.

"Despite concerns over the recent downturn in commercial property markets, more than 30% of respondents expect to increase their exposure to real estate over the next 18 months," says James Patterson, chief executive officer at Knight Frank Australia.

"From the family offices surveyed it's evident investors are increasingly conscious that they can now acquire assets at an attractive entry point off the back of the downturn and with strong prospects of cyclical recovery in the medium term."

Drilling down, Knight Frank found that wealthy investors will preference the industrial sector (42%) and data centers (21%) when it comes to future real estate investment, followed by the infrastructure and retail sectors (both 18%).

Luxury real estate values increase 

On the residential real estate front, Knight Frank's report revealed that property prices ticked up again in four of Australia's five largest 'prime' (the top 5% of each market by value) markets last year.

The luxury market in Perth led the way with 5.3% price growth in 2024, followed by Brisbane (4.1%), the Gold Coast (3.6%) and Sydney (1.1%). Prices in Melbourne's prime market fell by 1.9%.

Liam Bailey, the global head of research at Knight Frank, expects that growth rates will moderate in most of these markets as 2025 progresses though.

"This year Perth is again expected to lead luxury property price growth, with a 3% predicted rise, followed by Brisbane and the Gold Coast with 2% and Sydney at just 1%. Melbourne prices are expected to remain flat."

So how much does high-end property actually cost in Australia? Knight Frank found that US$1 million currently buys roughly 45 square meters of prime residential property in Sydney, 87sqm in Melbourne and 102sqm in Perth.

Perhaps unsurprisingly, even Sydney's figure pales in comparison to the world's most expensive markets. For instance, Knight Frank's report notes that the same amount of money would buy just 19sqm of real estate in Monaco and 22sqm in Hong Kong.

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