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Why the world’s millionaires move to Australia

 

8 October 2019

 

 

 

The land down under is the most attractive destination for wealthy individuals. Zoe Paterson explores why.

On measures of gross domestic product, sharemarket capitalisation and population, Australia is relatively small. Yet the country consistently tops the list of immigration destinations for millionaires worldwide, according to the AfrAsia Bank Global Wealth Migration Review, researched by New World Wealth.

Of the 108,000 high-net-worth individuals (HNWIs) who migrated from their home countries in 2018, about 12,000 took up residency in Australia, New World Wealth reported in the Review’s 2019 edition. The US was the next most popular destination, followed by Canada.

And the trend is set to continue. In this year’s edition of The Wealth Report, Knight Frank revealed that Australia was the first choice of destination for emigration, investment and residential property purchases for ultra-high-net-worth individuals from Asia and Australasia, and second for people from Africa.

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Top 5 countries by HNWI immigration in 2018

Source: New World Wealth
Rank Country New inflow of HNWI
1 Australia 12,000
2 United States 10,000
3 Canada 4,000
4 Switzerland 3,000
5 United Arab Emirates 2,000

Source: New World Wealth


Australia’s beautiful scenery and famously easy-going lifestyle have obvious pulling power, but its appeal to HNWIs is more than skin deep.

Australia’s stable economy and political environment, high-quality healthcare and education systems, are key features that make it attractive to the rich, says ANZ Private head of international segment Grace Bacon.

“Depending on where geo-political instabilities are in the world, we tend to receive enquiries from potential clients wanting to come to Australia from these impacted regions,” Bacon says.

Bacon’s team has recently seen an uptick in enquiries from wealthy Hong Kong residents looking to migrate to Australia, following months of protests and social unrest in the region. The team has been fielding two to three enquiries a week from Hong Kong, compared to about one per quarter before the crisis began, Bacon says.

“They are enquiring about how they can establish a financial footing in Australia and how they could go about the migration process,” she explains.
 

Protests and unrest in Hong Kong this year has caused its high-net-worth residents to consider their emigration options.

 

Significant investor visas become more popular

Wealthy people move to Australia on a variety of visa classes, but a growing number are taking advantage of the significant investor visa (SIV) available to entrepreneurial and wealthy individuals who commit at least $5 million to complying Australian investments.

In 2018, numerous applications for SIVs came from South Africa, Vietnam, Malaysia, Bangladesh, India and Iran, according to data released by the Australian government’s Department of Home Affairs to ANZ Bank under a freedom-of-information request. However, data showed that most applications came from China.

Visa applicants undergo stringent background checks by the Australian government and the visa process can take up to 12 months, Bacon says.

In Australia, immigration policies and criteria changes regularly, potentially adding more difficulty for applicants. So it’s important that potential applicants seek professional advice from qualified migration agents or lawyers accredited with the Migration Institute of Australia.

Bacon says people have issues when they fail to seek appropriate assistance: “To avoid complications, potential migrants should seek advice from reputable advisers and reputable migration agents and lawyers.”

What wealthy foreigners like about Australia

Chinese migrants, motivated in ways similar to migrants from other countries, are drawn to Australia to establish a base for themselves outside of their home country.

“They like the plan B,” says Bacon. “They want to become ‘global citizens’ where they acquire a second citizenship or second residency elsewhere to diversify their wealth and their asset base outside of China. They usually retain a footing back in their home country.”

HNWIs often want their children to be educated in English. Australia's school system, with its focus on sport, soft skills and social development, as well as academic achievement, is a major drawcard.

“A lot of Asian countries have a very academic-focused education system and I think the newer generation realises that the whole academic drive doesn’t rear well-rounded children,” Bacon says.

At the tertiary level, Australian universities hold their own on the international stage. Seven Australian universities were ranked in the top 100 universities worldwide by QS World University Rankings for 2020.

“Australia is already attracting a lot of international students and as they graduate and look at career opportunities, some of them settle in Australia and in turn their families often join them,” Bacon says.

With older generations looking to join their children, Australia’s quality healthcare systems and support for older people and those with disabilities are highly regarded.

Australia’s diverse population is also appealing, says Deloitte Private partner Peter Pagonis: “It makes it easier for people to come here. People are attracted because we’re already multicultural.”

Data from the latest census, conducted in 2016, shows that nearly half of Australia’s population was either born overseas or had one or both parents born overseas. One in five speak a language other than English at home.

 

What rich immigrants do in Australia

Wealthy migrants don’t consider immigration an end in itself. Maximising the advantages of their new home is top of mind, says Pagonis.

“They’re thinking about the next generation and the opportunities that come about for that next generation … Australia is a young country, there are a lot of opportunities,” he says.

Australia has been the fastest-growing developed-world market over the past 20 years in terms of economic, wealth, income and property price growth, New World Wealth reported in its AfrAsia Bank Global Wealth Migration Review.

Personal wealth in Australia has risen by around 140 per cent during that time, compared with only 90 per cent growth in the US, New World Wealth reported.

Migrants see business opportunities in Australia and can bring expertise, innovative ideas, and a global network of contacts to benefit Australian enterprises.

About 2000 SIVs have been granted since the program began in 2012, translating to $10 billion worth of investment, according to a Deloitte Access Economics analysis.

These funds are invested in areas as diverse as real estate, health and medical science, renewable energy, and environmental management, Deloitte found.

In the past, most wealthy migrants settled in Melbourne and Sydney to be close to good schools, universities and business opportunities. While this is still the case, many are moving to other states and into regional areas, says Bacon.

“Some states are trying to attract investment and new business industries and are a lot more flexible with their criteria. That’s making people think outside of Victoria and NSW,” she says.

South Australia, for example, boosted the number of SIVs available to 705 in the 2018-19 program year, up from 570 in 2017-18.

One high-net-worth migrant ANZ Private has helped has invested in the agribusiness sector in regional Victoria and partnered with local universities to support research into ways to combat the effects of climate change on farm management and practises.

“He’s helping local farmers who are seeking investments and support. He has invested in this sector and kept the local families and personnel to help run and operate the business to ensure there is continuation of employment of the communities,” she says.

Zoe Paterson is a financial and property journalist, formerly at The Australian Financial Review, and now based in Canada.

 

To discuss what this insight could mean for you, talk to your ANZ Private Banker directly, or contact us below.

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