Knight Frank launches The Wealth Report 2016 (10th edition)

Knight Frank launches The Wealth Report 2016 (10th edition)

15 March 2016, Malaysia – Knight Frank, the independent global property consultancy, launched the 10th edition of The Wealth Report 2016 yesterday. The report tracks the growing super-rich population in 98 cities across 91 countries. 

                      

Highlights of Ultra-High-Net-Worth Individuals (UHNWIs) population

– those with US$30m or more in net assets – according to data provided by New World Wealth for Knight Frank Wealth Report:

  • In 2015, almost 6,000 people dropped out of the UHNWI wealth bracket – a 3% slide, where only 34 of the 91 countries for which individual data is compiled saw a rise in UHNWIs. This is the first annual dip in ultra-wealthy populations since the global financial crisis began in 2008.
  • There are now 187,468 UHNWIs globally – marking a 61% rise from a global UHNWI population of 116,800 in 2005.  
  • By 2025, the global population of UHNWIs is set to rise by 41% to 263,483; growth is set to be significantly slower than the previous 10 years. 
  • Asia tops the absolute increase in UHNWI population among the world regions, both in the last 10 years and in the next 10 years.

Globally, zooming in on Asia:

  • China and India are ranked 2nd and 3rd respectively in an absolute increase in UHNWI populations over the next 10 years.
  • Singapore emerged as the second top Asian city with the most number of UHNWIs among the top 20 cities globally in 2015, with Hong Kong still the highest number with 3,854 UHNWIs.
  • Malaysia sees 64% growth in the population of UHNWIs to 1,629 over the next decade.

Nicholas Holt, Head of Research for Asia Pacific, Knight Frank Asia Pacific, says, “Of the 19 countries tracked within Asia Pacific, 12 saw their UHNWI populations fall in 2015, principally as a result of global macroeconomic events, including the Chinese slowdown, the fall in the price of oil, volatile equity markets and the strengthening of the US dollar. Looking at a longer time horizon however, Asia especially has been fertile ground for the growth in the number of UHNWIs, with more individuals surpassing the US$30m barrier than in any other region over the last ten years.” Sarkunan Subramaniam, Managing Director, Knight Frank Malaysia, says, “Year after year Malaysians continue to show a propensity for exporting capital in a need to preserve and grow their wealth – with a strong appetite for property. This appetite is underlined by the Attitudes Survey, which showed that 39% of UHNWIs in Malaysia are considering a residential purchase in 2016, the highest in the world. 

“In terms of overseas destinations, Malaysia’s top choice is currently Australia, which offers a favourable exchange for the Ringgit and good returns on property, not forgetting excellent educational and employment opportunities. Education will likely remain a significant driver with 77% of respondents in Malaysia saying demand for overseas education from Malaysian UHNWIs will significantly increase over the next 10 years.” 

Additionally, The Wealth Report Attitudes Survey asked the wealth advisors on their clients’ changes in portfolio allocation towards residential property. 65% of Malaysian respondents said asset allocation to residential property has increased over the last decade; while the same percentage said allocations would also increase over the coming 10 years – the highest seen across UHNWIs in Asia Pacific for both decades.

Subramaniam adds, “Malaysians continue to put more faith in brick-and-mortar because property has given them very good returns over the last decade, and it will continue to do so in the next 10 years. Property has consistently outperformed many other asset classes in Malaysia.”

The average age of those with net assets of US$10m or more is also examined in the report. While these multimillionaires in developed economies such as the UK and Switzerland are likely to be their mid to late 50’s or 60’s, developing economies tend to have younger multimillionaires. This highlights the opportunity for wealth creation in rapidly expanding economies, as well as the increase in global trade and mobility.

Holt explains, “Much of this newfound wealth in Asia has had an impact on the age profile of Asia’s wealth brackets, reflecting the recent nature of the growth and opportunities in these markets. The average age of populations with US$10m or more in net assets is a case in point, with Chinese individuals in this bracket on average 10 years younger than their Swiss counterparts.” 

Over the past decade, The Wealth Report has ranked the cities that matter most to the world’s wealthy, based on where they live, invest, educate their children, grow their businesses, network and spend their leisure time. On all measures, year-in-year-out, London and New York have vied for the two top slots. No other city comes close in terms of their breadth and depth of appeal.

Highlights – according to the results of our Attitudes Survey of wealth advisors:

  • London has beaten New York for the second successive time to win the accolade of ‘most important city to UHNWIs’.
  • Singapore has also beaten Hong Kong, displacing Hong Kong from the third place.
  • Sydney has re-entered the top 10 list taking the eighth position.
  • When asked if New York or London could ever be overtaken in the coming decade, about half of the respondents for the Attitudes Survey said no.  Of the 34% of respondents who said yes, Singapore, followed by Dubai, are the top contenders to be the next ‘most important cities to UHNWIs’ in the next 10 years. Countries that responded ‘Yes’ and picked Singapore include respondents from Singapore, India, Australia, the US, Hong Kong, UAE, the UK, Malaysia and China (in decreasing order). 

To download the report, please visit:  http://www.knightfrank.com/wealthreport

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