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6 things we learned from the Knight Frank Wealth Report

People & Companies / Latest News

Australia

Mar 08 2017

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Al Gerard de la Cruz

Wealth has never scaled more dizzying heights than in 2016, according to the new Wealth Report released Wednesday by Knight Frank.

The annual report saw the populace of ultra-high-net-worth individuals (UHNWI), defined as those with wealth of at least USD30 million, multiplying amid seismic political events on both sides of the Atlantic, where most of the world’s ultra-wealth remain concentrated.

Globally, there were 193,490 UHNW individuals in 2016, a 42 percent jump from 2015, a year that saw a drop in growth. By 2026, that number should soar 43 percent to 275,740, the researchers predicted.

“Investors are now well aware that anything is possible when voters are called to the ballot box,” according to Knight Frank chief economist James Roberts.

“Asia has been through several years of readjustment, due to commodity price corrections and a shift away from export-driven growth towards a consumer-led economy. In 2017, this will begin to pay dividends, as threats of Western protectionism recede and domestic consumption creates a more self-reliant Asia.”

The property consultancy surveyed around 900 private bankers and wealth advisors representing more than 10,000 clients, representing a combined wealth of around USD2 trillion.

Among the biggest findings from the report:

Vietnam is one fast-growing home to the ultra-rich

From 2006 to 2016, the number of UHNWI in Vietnam grew 320 percent, the fastest growth rate in the world. Even China lagged with a growth of 281 percent. Vietnam now has 200 UHNWIs.

Asia’s UHNWI will be bullish on real estate overseas almost as much as locally

While 32 percent of investment portfolios by ultra-wealthy Asians will be allotted to local real estate in the next two years, around 29 percent will be bought outside their respective countries of residence.

In contrast, UHNWI in Australia were likelier to buy local homes, with 31 percent intent on buying domestically as opposed to 12 percent overseas. Worldwide, the UK and the US were the most favoured destinations for overseas property seekers.

Explosive Chinese growth

Thirty-nine percent of Chinese respondents were likely to buy homes outside the country, the highest level of overseas buying preference among the countries surveyed. The desire for international assets hovers despite China’s recent crackdown on capital flows.

In 10 years, the nation will be home to 140 percent more ultra-rich denizens. At the current rate, China is producing 100,000 new millionaires a year.

Every Asian UHNWI is buying more homes than ever

Malaysian and Taiwanese respondents bought four homes on average last year, while respondents in Saudi Arabia and the UAE purchased 4.3 and 3.4 homes, respectively.

Asian cities are the hottest in luxury homes

Shanghai registered the biggest increase in high-end luxury property values, at 27.4 percent, among 100 markets surveyed by Knight Frank. Beijing was behind at 26.8 percent, followed by Guangzhou (26.6 percent). Seoul luxury home values grew 16.6 percent.

Priorities, priorities

Sixty-six percent of the mega-affluent are concerned about wealth preservation, according to the report’s “Attitudes Survey.” Sixty percent are concerned about capital growth, while more than 50 percent ponder on “passing wealth onto the next generation.” Around 44 percent considered minimising risk from their investments.

SOURCE: Property Report

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