What it takes to be considered wealthy in Australia

The amount of money needed to be among Australia’s top one percent has doubled over the past two years, a new report has revealed.

The Wealth Report 2023 released by Knight Frank today shows that to be amongst those in the country’s high net worth individuals in 2023, Australians require a minimum of US$5.5m, up from US$2.8m in 2021. The findings place Australia in third place, beyond Monaco and Switzerland in terms of the money required to be considered among the wealthiest in the country, up from seventh position just two years ago.

Based on current trends, that figure is set to rise significantly over the next five years, the report said, with the number of high net worth individuals set to rise by 71.1 percent and ultra high net worth individuals increasing by 40.9 percent.

To be counted among ultra high net worth individuals, according to Knight Frank, would require net wealth exceeding US$30m.

Knight Frank’s head of residential research Australia, Michelle Ciesielski property was a key driver of wealth in Australia.

“A large contributor to the top one percent wealth level doubling in Australia over the past two years has been prime residential property performance recording an upward trajectory, resilient despite the rising cost of finance, as we know 49 percent of this cohort tend to be cash buyers,” she said. “On average, the (ultra high net worth) UHNW population in Australia owns 2.9 homes, or equivalent to 36 percent of their total wealth is in primary and secondary homes.”

Ms Ciesielski cautioned that with more Australians struggling to get a foot on the property ladder and increasing attention on sustainability, assets held by high net worth individuals may come under greater scrutiny.

“It’s notable that the ongoing inequality of global wealth could see a greater focus on this group – particularly in terms of greater taxation on assets to support government spending throughout the pandemic, and even emissions as countries seek to develop sustainable strategies for the environment and society.”

China’s securities regulator is ramping up support for the country’s embattled equities markets, announcing measures to funnel capital into Chinese stocks.

The aim: to draw in more medium to long-term investment from major funds and insurers and steady the equities market.

The latest round of policy boosts comes as Chinese stocks start the year on a soft note, with investors reluctant to add exposure to the market amid lingering economic woes at home and worries about potential tariffs by U.S. President Trump. Sharply higher tariffs on Chinese exports would threaten what has been one of the sole bright spots for the economy over the past year.

Thursday’s announcement builds on a raft of support from regulators and the central bank, as officials vow to get the economy back on track and markets humming again.

State-owned insurers and mutual funds are expected to play a pivotal role in the process of stabilizing the stock market, financial regulators led by the China Securities Regulatory Commission and the Ministry of Finance said at a press briefing.

Insurers will be encouraged to invest 30% of their annual premiums earning from new policies into China’s A-shares market, said Xiao Yuanqi, vice minister at the National Financial Regulatory Administration.

At least 100 billion yuan, equivalent to $13.75 billion, of insurance funds will be invested in stocks in a pilot program in the first six months of the year, the regulators said. Half of that amount is due to be approved before the Lunar New Year holiday starting next week.

China’s central bank chimed in with some support for the stock market too, saying at the press conference that it will continue to lower requirements for companies to get loans for stock buybacks. It will also increase the scale of liquidity tools to support stock buyback “at the proper time.”

That comes after People’s Bank of China in October announced a program aiming to inject around 800 billion yuan into the stock market, including a relending program for financial firms to borrow from the PBOC to acquire shares.

Thursday’s news helped buoy benchmark indexes in mainland China, with insurance stocks leading the gains. The Shanghai Composite Index was up 1.0% at the midday break, extending opening gains. Among insurers, Ping An Insurance advanced 3.1% and China Pacific Insurance added 3.0%.

Kai Wang, Asia equity market strategist at Morningstar, thinks the latest moves could encourage investment in some of China’s bigger listed companies.

“Funds could end up increasing positions towards less volatile, larger domestic companies. This could end up benefiting some of the large-cap names we cover such as [Kweichow] Moutai or high-dividend stocks,” Wang said.

Shares in Moutai, China’s most valuable liquor brand, were last trading flat.

The moves build on past efforts to inject more liquidity into the market and encourage investment flows.

Earlier this month, the country’s securities regulator said it will work with PBOC to enhance the effectiveness of monetary policy tools and strengthen market-stabilization mechanisms. That followed a slew of other measures introduced last year, including the relaxation of investment restrictions to draw in more foreign participation in the A-share market.

So far, the measures have had some positive effects on equities, but analysts say more stimulus is needed to revive investor confidence in the economy.

Prior enthusiasm for support measures has hardly been enduring, with confidence easily shaken by weak economic data or disappointment over a lack of details on stimulus pledges. It remains to be seen how long the latest market cheer will last.

Mainland markets will be closed for the Lunar New Year holiday from Jan. 28 to Feb. 4.

What it takes to be considered wealthy in Australia

Property price surges propelled Australia into third position in the world, wealth report reveals

The latest round of policy boosts comes as stocks start the year on a soft note