_The ‘next generation’ of Australia’s ultra-wealthy population

The global real estate consultancy’s The Wealth Report 2022 found that globally, UHNWIs grew by 9.3 per cent in 2021, up from 2.4% in 2020.

In Australia, the UHNWI population grew by 10.1 per cent in 2021, ranking as the 14th fastest globally, with the population projected to grow by 31 per cent over the next five years.

Australian UHNWIs are optimistic for this year, with 91 per cent predicting an increase in their wealth, higher than 86 per cent predicted one year ago, according to the research.

Over the next five years the UHNWI population is forecast to grow globally by a further 28 per cent, with Asia and Australasia seeing the largest growth, at 33 per cent.

Across the UHNWI populations, the proportion of under 40s is on the rise, with The Wealth Report 2022 finding that in Australasia, 14 per cent of the UHNWI population were in this age bracket, totalling 3,367 people.

In other countries the proportion is much higher, with the global average being 21 per cent.

How are under-40 UHNWI different from over 40s?

A significant portion of the future growth in UHNWIs in Australia is expected to come from those under the age of 40.

Many of these under 40s are self-made through technology start-ups, the wellness industry or property development, according to Partner, Interim Head of Residential Australia, Erin van Tuil.

She said the demographic of UHNWIs was clearly changing, and this was evident in the buyer profile at One Barangaroo, with almost 60 per cent of buyers aged in their 40s or under.

“Young people are delivering on some exceptional ideas and are becoming wealthy as a result – the young people we have in One Barangaroo are mostly self-made,” she said.

UHNWI under 40 are generally different to over 40s in their attitudes to wealth and in the types of properties they desire.

Ms van Tuil said under 40s were less discrete than previous generations about their wealth.

“They’re comfortable about spending and showing they have money,” she said.

“It’s not in a grotesque way, but in comparison to older generations who are generally more discreet, the new generation is very comfortable with living in an amazing home and buying nice things and showing them off, such as a distinguished watch collection.

“They’re very comfortable having a good time.”

Image: Penthouse at One Barangaroo 

What types of properties do UHNWI under 40 want?

The type of home over 40s and under 40s want often differs for several reasons.

Family is a consideration for over 40s, as they often have children and need more space than under 40s who may have a smaller household, so they tend to opt for houses, said Ms van Tuil.

But aside from the size of their household, over 40s have also grown up seeing a house in Sydney’s eastern suburbs, for example, as the epitome of success and have therefore strived to attain that.

“That idea feels different for the younger generation,” she said. “They are about lifestyle and convenience, and as a result are looking for homes that provide that, which often comes in the form of an apartment, and often an apartment with services.

“It’s like the status symbol has changed for the younger generation.

“It’s less about the house in eastern suburbs or the holiday home in Palm Beach; now it’s about the ritzier apartment and convenience of lifestyle.

“Under forties travel a lot, so a lock up and leave element is really useful for them.

“They don’t have to think about maintenance – they call the concierge who comes and sorts it all out for them.

“At One Barangaroo it’s also about the room service and restaurants on site and the ease of living.

“It’s a much easier lifestyle and much better fit for the way the younger generation lives.”

In addition to convenience, service provision and amenities, when it comes to what under 40s want in a luxury home, it’s about space for entertaining rather than the number of bedrooms, said Ms van Tuil.

There is also a focus on smart technology, energy efficiency and connectivity, both digital and physical, added Adam Ross, Knight Frank Associate Director, Prestige Residential.

He said migration patterns among UHNWIs were changing, with under 40s bucking the traditional trends.

In Sydney, he said, young UHNWI who grew up in the eastern suburbs were moving to the lower north shore or the northern beaches for value and the right product.