Australia cashes in on influx of millionaires

The entrance and interior of a two-storey, 2,658 sq ft property for sale in Woollahra in the upscale eastern suburbs of Sydney, which has seen home values rise 18 per cent in the past year amid an influx of foreign millionaires.
PHOTO: NYTIMES

Sellers of high-end products benefit as the country becomes No. 1 destination for wealthy

At the two high-end showrooms operated by BMW in Melbourne's city centre, customers can not only choose their preferred car but also select whether to talk to sales staff in English, Mandarin or Cantonese.

In recent years, the showrooms  - where cars cost from A$50,000 (S$54,000) to more than A$150,000 - have increasingly served customers from abroad, especially China. So staff were employed to suit the clientele, said Mr Geoff Briscoe, dealer principal of BMW Melbourne's Kings Way and Southbank dealerships.

"The growth in economic immigration has had a big impact on us," he told The Sunday Times.

"Our main source of economic migrants is mainland China. We also have a rising number from India who are quite wealthy," he noted.

For sellers of high-end products in Australia, from cars to jewellery and fashion, the clientele has become increasingly cosmopolitan in recent years. Boasting a moderate climate as well as a stable economy and political environment, the nation has become a hot spot for the world's wealthy. For each of the past two years, it has been rated the world's No. 1 destination for millionaires.

The entrance and interior of a two-storey, 2,658 sq ft property for sale in Woollahra in the upscale eastern suburbs of Sydney, which has seen home values rise 18 per cent in the past year amid an influx of foreign millionaires.

The entrance and interior of a two-storey, 2,658 sq ft property for sale in Woollahra in the upscale eastern suburbs of Sydney, which has seen home values rise 18 per cent in the past year amid an influx of foreign millionaires.PHOTO: NYTIMES

  • MILLIONAIRES RECEIVED

  • AUSTRALIA 11,000

    UNITED STATES 10,000

    CANADA 8,000

Last year, Australia received 11,000 millionaires from abroad, compared with 10,000 who went to the United States and 8,000 to Canada, according to research by New World Wealth, a South African market research firm.

The largest sources of departing millionaires were France, with 11,000; China, with 9,000; Brazil, with 8,000; and India and Turkey, with 6,000 each.

Car dealers said the steady flow of millionaires has had a noticeable impact. Sales of high-end models increased 16 per cent last year, compared with general sales, up just 2 per cent.

A veteran dealer at Sydney's Len Vine Automobiles, Mr Nicholas Prossimo, said wealthy Chinese in Australia primarily opt for new Mercedes and BMW vehicles.

He noted that some younger arrivals have bought "super luxury" cars, with their top preference being Ferrari, followed by Lamborghini.

"They (wealthy Chinese migrants) buy a huge amount of brand new Mercedes and a phenomenal amount of BMWs," he said.

The rush to Australia has been boosted by a weakening currency and a relatively strong economy.

Despite a recent slowdown, the nation recently recorded 25 years of continuous growth - more than any other country.

Most of the foreign millionaires have settled in the two largest cities, Sydney and Melbourne.

The influx has added to a property boom in recent years, with Sydney home values rising 18 per cent in the past year. It has also led to higher demand for high-end jewellery and watches, plus places at elite private schools.

The bulk of the foreign millionaires have entered via more traditional visa schemes, such as those encouraging skilled migrants and business owners.

At BMW's showrooms in Melbourne, Mr Briscoe said Chinese customers often turn up within a week or two of arriving in Australia.

About a quarter of BMW Melbourne's 2,000 car sales last year were to Chinese customers.

 Mr Briscoe said they mostly pay cash because they do not yet have access to local loans.

Their preferences tend to be similar to those of other buyers.

"The older customers are more conservative... The younger guys and girls go more sporty and flashy.

"They are happy to show off."

A version of this article appeared in the print edition of The Sunday Times on March 05, 2017, with the headline 'Australia cashes in on influx of millionaires'. Print Edition | Subscribe