Australian Asset Review —Enrichment Success PTY LTD

Market Review

How Australian asset classes have moved over the last 20 years

A descriptive look at historical ranges. No forecasts.

When clients ask us "what is a normal return?" we usually push back on the question. There is no single normal —the answer depends on which 20-year window you pick, which asset mix, and whether you adjust for inflation. What we can do is describe the range.

Australian equities

Over rolling 20-year windows, the All Ordinaries has delivered long-run nominal returns in the high single digits to low double digits, with real returns after inflation materially lower. Along the way, there have been drawdowns of 40 to 50 per cent —the early 2000s, the GFC, the 2020 COVID shock. Anyone building a plan that assumes no drawdown is planning against history, not with it.

Cash and fixed interest

Cash returns have tracked the cash rate, which over the last 30 years has moved from double digits in the early 1990s to near zero in the 2010s, back to 4 per cent plus in 2023-24. The 2010s were an anomaly; the longer average is higher. Income-focused clients who remember 1990s deposit rates are planning off a different world.

Residential property

Australian residential property has had very long upswings and shorter corrections. The 2010s saw substantial price growth in Sydney and Melbourne, followed by a 2017-19 correction and the 2020-21 upcycle. The data shows clearly that property is not a one-way bet, even in Australia.

Property and equities have different long-run patterns

The point

Every asset class has had a period where it looked unstoppable, and a period where it looked broken. The planning conversation is not about picking the next unstoppable one. It is about building a mix that survives the broken periods without forcing a sale.

Sources: RBA, ABS, ASX historical data. This note is descriptive and does not constitute investment advice.

Tax

Australian tax residency: the four tests

A descriptive look at residency tests and their cross-border implications.

Australian tax residency determines whether your worldwide income is taxable in Australia, or only Australian-sourced income. The rules are not as simple as "how many days you spend in Australia." This note describes the framework; it is not tax advice.

The residency tests

The Australian Tax Office applies four tests. If you pass any one, you are an Australian tax resident. The tests are: (1) the resides test — you actually reside in Australia; (2) the domicile test — your permanent home is in Australia; (3) the 183-day test — you spend more than half the income year in Australia; and (4) the superannuation test — you are an Australian government employee working overseas.

Why it matters

An Australian tax resident is taxed on worldwide income (including overseas salary, rent, interest and dividends), with credits for tax paid overseas. A non-resident is taxed only on Australian-sourced income. The difference can be substantial for someone who has overseas investments or a foreign pension.

Temporary residents

Some visa holders are classified as temporary residents. They are taxed on Australian income but exempt on most foreign income and foreign-source capital gains. This status depends on visa type and is not automatic. It can change when the person applies for permanent residency.

Double tax agreements

Australia has double tax agreements with over 40 countries. These agreements modify the domestic residency rules to prevent double taxation and determine which country has primary taxing rights over specific income types. The tie-breaker rules in each agreement are specific and should be checked before assuming which country has taxing rights.

Common pitfalls

New arrivals often assume they are not tax residents until they have spent six months. In practice, the resides test can apply much earlier. Departing residents often assume they become non-resident the day they leave; in practice, the domicile test can keep them Australian tax residents if their permanent home remains in Australia. These assumptions can lead to unexpected tax bills.

The planning point

Tax residency should be determined before a move, not at the end of the financial year. A scoped review with a registered tax agent, ideally before relocation, avoids retroactive surprises. This is one of the highest-value conversations a cross-border individual can have.

This note is general information only. Not tax advice. Consult a registered tax agent.

Australian Major Asset Market Review