Where do the ultra-rich spend their cash?

The general public has always had a fascination with extremely wealthy people. Where do they live? What do they wear? What do they eat? People almost look upon the ultra-rich as a rare subspecies.

In 2021, the world is dialled into a space race between three billionaires – Amazon’s Jeff Bezos, Tesla’s Elon Musk, and Virgin’s Richard Branson. Years ago, the question was: what yacht did so-and-so buy? Now it’s: Which so-and-so will go into space next?

People like to peruse how the other half (or, in this case, the very top fraction) live. It’s human nature. Sometimes it’s to merely satisfy a curiosity. Sometimes it’s to covet. Sometimes it’s to inspire. And sometimes it’s to simply be amused.

In 2021 in Australia, there are approximately 1,200 people worth US$50 million or more. To put that in perspective, that’s around five ultra-rich Australians for every 100,000.

When they splash out, they splash out large, whether on a property or luxury consumer goods.

Source: © Doppelganger4 | Megapixl.com

So, let’s have a look at where Australia’s ultra-rich spend their money.

INTERESTING READ: Australia Rich List 2021: Gina Rinehart grabs the top spot for the second year on the trot

Luxury Property

The ultra-rich have been attracted to the most desirable properties in the most expensive locations.  This equates to the top 5% of each market.

In terms of location, Australia’s two major cities – Sydney and Melbourne – have many of the country’s most luxurious suburbs. In Sydney, suburbs such as Port Piper, Vaucluse, and Rose Bay contain some of the most decadent houses in the country.

In Melbourne, Toorak – located five kilometres from Melbourne’s CBD- is home to some of the wealthiest people in the country.

Residents of Toorak include businessman and billionaire Lindsay Fox and property developer John Gandel.

Source: © Ymgerman | Megapixl.com

In July 2021, Australia’s ultra-rich spent nearly AU$7 billion on luxury properties across Australia.

The reason for this, possibly, is that these wealthy Australians have been forced to stay in Australia due to the Covid-19 lockdowns, as opposed to travelling the world. 

Australia recorded its highest ever quarterly turnover for luxury property in the first quarter of 2021.

During this time, Sydney experienced a 58% growth, Melbourne experienced a 24% growth, Brisbane experienced a 54% growth, and Perth experienced a massive 85% growth.

DO READ: Ten most expensive suburbs in Australia

Tangible Assets

Since 2008, Australia’s very wealthy have also spent a lot of money on tangible assets.

Although this includes property, it also includes things like fine art and fine wine as well as expensive luxury cars.

Luxury sports cars (Source: © Imdan | Megapixl.com)

Earlier this year, the Australian Tax Office (ATO) warned Australians who had purchased these types of luxury goods to declare all their income tax or face audits.

The ATO can now get insurance policy information on expensive items like luxury vehicles, thoroughbred horses, fine art, and marine vessels.

If the cost of the item doesn’t match up with the declared income, it arouses the ATO’s suspicions that the taxpayer is declaring less than they ought to.

Moreover, the ATO will hold onto that data for five years, meaning they can audit these high-income taxpayers retroactively.

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