—words Kirsten Craze
In a time of geopolitical instability, evolving tax regimes and shifting property values, is Australia becoming a prime relocation choice for the global elite?
Global unrest, changing international tax policies, and a desire for a better standard of living are all catalysts for ultra-high net worth individuals currently reevaluating where they wish to park their money and relocate their families. Australia may not be at the top of the international tax haven hit list compared with the likes of Switzerland, the Cayman Islands or Singapore, but its secure economy, stable political climate, enviable lifestyle and world-class real estate make a move Down Under financially stack up for affluent families looking to rehome their wealth.
Data shows Australia is high on the relocation radar for a swathe of global house hunters. Searches for properties to buy on realestate.com.au rose 9 per cent month-on-month and 3 per cent year-on-year in July, which is the highest mid-year figure in five years. According to the PropTrack Overseas Search Report, US-based buyers have searched for Australian homes more than any other origin country in recent months, likely due to the heated presidential race.
Report author Karen Dellow says: “In recent years, we have observed spikes in searches from specific countries during periods of political, social or economic change. The increase in searches from the United States came when polls suggested Donald Trump was favoured to win the election.” While she notes that a certain amount of this activity can be attributed to Australians living overseas, the appearance of affluent neighbourhoods such as South Yarra and Brighton in the top 10 underscores a broader recognition of Melbourne’s lifestyle appeal. “The sustained growth in searches coming from the US over the past five years suggests it’s a combination of interest from different cohorts of the population,” Dellow adds.
Searchers from China, Hong Kong and India are also notably focused on Melbourne, according to the report. When combining searches from all countries and price brackets, the Victorian capital emerges the most popular location, followed by Brisbane and the Gold Coast.
GREAT WEALTH EXODUS
According to research by British-based citizenship advisory firm Henley & Partners, around 128,000 of the world’s millionaires will relocate in 2024. Among the factors influencing their choice of destination—and whether to move at all—is the impact of evolving tax regulations. For instance, the UK Labour party’s proposal to eliminate favourable tax treatment for nondomiciled residents on overseas earnings is reportedly driving many UHNWIs to leave London. Similarly, Los Angeles realtors suggest that the introduction of a so-called mansion tax last year, imposing a 4-5.5 per cent levy on property sales over US$5m, has deterred many from establishing permanent roots in the city.
Darian Kuzma, the Victorian head of NAB Private Wealth’s UHNW team, says that while Australia might not be on a level playing field with ‘tax-friendly’ nations, this country offers other favourable conditions. “Can we compete with the likes of SIngapore? No, not when you’re comparing a flat non-resident tax rate with our heavier and progressive tax system, but the drive here is less about tax than it is other factors like liveability, climate, education and healthcare. For the ultra wealthy or wealthy middle class, Australia is a great place to raise your family.”
He continues: “Being surrounded by water means Australia is considered safer from a future Covid-style outbreak or physical threat than New York, while our climate is much better than London’s. And the fact that both our secondary and tertiary education institutions are well renowned drives a lot of migration.”
such as the recently sold 150
Jones Road are a compelling draw
for international buyers seeking a
premium sea change.
Standardised healthcare and wide open space also figure highly in conversations with non-residents, says Kuzma. “The bang for buck in terms of the size of the properties you can buy is certainly better in some parts of Australia than what you’ll find in, say, Singapore. The Asian city state might have the draw of a better tax structure for individuals, but that’s coupled with a very high cost of living.”
Based on property trends and his own interactions with worldly investors, Kuzma is confident that Melbourne and Sydney are well on the path to being globalised cities. “We’ve seen a couple of recent sales of $75m-$80m in Melbourne and some transactions over $100m in Sydney so it’s not hard to imagine our prices trending similarly to New York, Paris or London in the future, where the ticket price to buy into the prestige suburbs is quite substantial.”
Data released by the Australian government’s Foreign Investment Review Board recently showed that over 1500 residential real estate investment proposals worth a total of $1.9bn were approved in the final quarter of 2023. Some $800m of these came out of China, plus an additional $100m from Hong Kong. Indian, Vietnamese and Taiwanese buyers played a key role too, with each nationality contributing $100m to Australian home purchases.
CHASING SECURE SHORES
Lily Ong, a Melbourne-based immigration specialist and property lawyer, also finds that Australia’s lifestyle positives typically outweigh the tax negatives for her clients. “We do tax pretty highly, especially those who buy a property here and leave it vacant for an extended time, [but] some of these individuals are happy to absorb those costs,” she says. “These high-value home buyers can afford to live anywhere in the world but want their children to have an Australian education; they like our weather, our wide open spaces and health system.” She adds: “In reality, many of them consider Australia relatively inexpensive because our dollar is weak.”
After 30 years in immigration law, Ong has noticed an uptick in enquiries from US, European and Russian citizens about the pathway to living in Australia. She explains: “Political reasons are definitely behind some of the individuals looking to move here. We’ve previously seen a lot of clients move to places like the UK or US, but now they’re looking to come to Australia. People perceive us as a safe haven, they feel that they can come here and be themselves… and we’re a democratic country with [robust legal protections].”
Kay & Burton managing director Ross Savas agrees that Australia ticks the right boxes for UHNWIs seeking security and opportunity. “For some, the ‘tyranny of distance’ means safety,” he says.
“For others, Australia means beautiful beaches and inviting cities in a world that feels overcrowded and over-polluted.
They’re saying ‘I want to bring up my family in a great country away from all the trouble of the world’.” He also highlights Australia’s position as a gateway to unparalleled prospects in the Asian Century; “Asia is the engine room of the world, and we’re in the right region to benefit from and contribute to that economic dynamism.”
this six-bed property at 82 Esplanade
in Brighton are highly attractive to
those seeking the open-air Australian
lifestyle.
havens resonate with worldly
buyers seeking sanctuary
and access to unspoiled
landscapes. Image: John White