‘Demi-Billionaires’ Drive Demand for Prestige Property

An increasing number of demi-billionaires, those with a cool US$500 million or more in net assets, are expected to boost demand in Australia’s prestige property market.

Strong economic growth combined with rising asset prices are cited as key drivers underpinning growth in the world’s demi-billionaire population, according to the Knight Frank analysis.

Wealth data specialists Wealth-X anticipate that Asia will be home to be more than 3000 demi-billionaires by 2022.

In the next four years, the number of people in Asia with US$500 million (A$700m) or more in net assets will surpass those in North America for the first time, according to the report.

“Wealthy investors drive demand for prime property across global markets,” Knight Frank’s head of residential Australia Sarah Harding said.

“Australia is fast becoming one of the top destinations considered by our clients in their global portfolios.”

The methodology for projecting this increase considers GDP growth, the performance of equity markets and other investments, as well as wealth distribution trends, and currency playing a key role.

In Australasia, Knight Frank’s head of residential research Michelle Ciesielski said the number of demi-billionaires will increase by 29 per cent from 70 to 90 by 2022.

“The continued increase in wealth in Australasia is being encouraged by stronger local economic conditions and performance of property investments over the past several years. In addition, international drivers including equity and bond performance has spurred on confidence,” Ciesielski said.

Wealth-X expects the number of demi-billionaires to grow from 490 to 990 in China.

The latest Juwai.com figures reveal Chinese investors purchased $23.9 billion of Australian real estate in 2017.

This figure representing $19.4 billion in residential and $4.5 billion in commercial acquisitions. Juwai's report said this was down $8.8 billion or 26.8 per cent from $33 billion in 2016.

Knight Frank's Wealth Report says one of the biggest drivers in the prime residential market globally is the demand for international education.

“We need to look on this global platform to truly appreciate the level of sophistication expected by the world’s wealthiest, including where they spend and invest; where they enjoy their downtime; and where they educate their children – now, and in the future,” Ciesielski said.

Wealth-X anticipates that there will be 9,570 demi-billionaires worldwide by 2022.

This figure has increased from 6,900 at the end of 2017.

Hero: Shanghai skyline

The number of wealthy Chinese individuals with $70 million or more in investable assets has risen 96 per cent since 2012, according to Knight Frank's report.