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Knight Frank launches The Wealth Report 2017 (11th edition)

17 April 2017

 ·        Asia closing in on the US as key hub for UHNWIs

·        Australian cities see highest net inflows of HNWIs

·        Australasia sees strongest regional growth in UHNWIs 2015-2016

 

Malaysia, 13 April 2017 – Knight Frank, the independent global property consultancy, today launches the 11th edition of The Wealth ReportThe report tracks the growing super-rich population in 125 cities across 89 countries. The number of Ultra-High-Net-Worth Individuals (UHNWIs) – those with US$30m or more in net assets – rose by 6,340 in 2016, taking the total to 193,490, according to data provided by New World Wealth for The Wealth Report. This growth reverses the decline of 3% seen in 2015. The increase has occurred despite ongoing political and economic uncertainty around the world having more of an impact on future trends. 

Wealth distribution – Regional level

 

At a regional level, North America may not be topping the charts in terms of growth rates, with its forecast of 31% growth over the next 10 years, but it will still be the key hub for UHNWIs in 2026, with a population of 95,860. However, Asia will be starting to challenge for this title. At present, Asia has 27,020 fewer UHNWIs than North America; by 2026, this difference will have shrunk to just 7,680.  Asia is also set to strongly outperform Europe in terms of the rate of growth of UHNWIs over the next 10 years, with a 91% increase predicted, compared with 12% in Europe. 

 

 World region

 

Number of UHNWIs $30m+

 % change

2006

2015

2016

2026

2006-2016

2015-2016

2016-2026

North America

         55,810

        69,270

             73,100

          95,860

31%

6%

31%

Europe

         42,610

        51,120

             49,650

          55,700

17%

-3%

12%

Asia

         20,820

        42,610

             46,080

          88,180

121%

8%

91%

Middle East

           4,970

          7,410

               7,370

          10,270

48%

0%

39%

Australasia

           2,270

          3,800

               4,220

            7,180

86%

11%

70%

Latin America & Caribbean

           5,330

          7,690

               7,570

          10,350

42%

-2%

37%

Africa

           2,010

          2,310

               2,270

            3,030

13%

-2%

33%

Russia and CIS

           2,380

          2,940

               3,230

            5,170

36%

10%

60%

TOTAL

       136,200

      187,150

           193,490

        275,740

42%

4%

43%

Source: New World Wealth, The Wealth Report 2017 (Pg 13)

 

 

Wealth distribution – City level

 

On a metro level, cities in the US and Greater China appear prominently near the top of the rankings in terms of absolute growth forecast over the next 10 years in the ultra-wealth bracket.  The US tops the chart with New York City reaching a population of 8,541.  With an exponential growth in the UHNWI population in China (140% growth forecast on a country level), Shanghai and Beijing are expected to close in on the US. 

 

The dramatic growth of UHNWIs in Asia is set to be reinforced by stellar growth rates in several countries, including Vietnam, which is expected to see its ultra-wealthy population rise by 170% to 540 over the next decade – the highest rate of growth in the world. 

 

Zooming in on the percentage growth forecast over the next decade, Ho Chi Minh City and Pune (both at 170%) tops the list, followed by Hyderabad and Bengaluru (both at 160%).  The top 20 on this list is largely dominated by mainland Chinese and Indian urban centres. 

 

Nicholas Holt, Head of Research for Asia Pacific, Knight Frank Asia Pacific, says, “The data shows a very dynamic wealth landscape around the world with the Asian region taking on the leading role in terms of growth of wealthy individuals over the next 10 years. In percentage terms, emerging Asian markets such as Vietnam will lead the way, although the true story behind Asia catching up with North America can be found when looking at China and India – the Asian behemoths will witness the second and third largest number of additions to the ranks of UHNWIs respectively over the next decade – behind only that of the US.” 

 

Sarkunan Subramaniam, Managing Director of Knight Frank Malaysia commented, “While Malaysia millionaires are mostly baby boomers, China and India have a large amount of millionaires among the Gen X which are expected to grow in the next few years. While North America tops the chart with highest number of millionaires, Asia is forecast to rise by 71% over the next decade.”  

 

Wealth distribution – Top 20 by CITY (UNHWI populations 2016, 2026)

Rank

City

Ultras ($30M+) 2016

UHNWI Forecast 2026

% change in UHNWIs

2015-2016

2016-2026

            1

New York City

                 6,570

            8,541

6%

30%

            2

Shanghai

                 2,580

            6,450

12%

150%

            3

Beijing

                 2,640

            6,336

10%

140%

            4

London

                 4,750

            6,175

-5%

30%

            5

Hong Kong

                 4,080

            5,712

6%

40%

            6

San Francisco Bay area

                 3,470

            5,205

12%

50%

            7

Los Angeles

                 3,150

            4,095

5%

30%

            8

Singapore

                 2,500

            3,500

6%

40%

            9

Mumbai

                 1,340

            3,350

12%

150%

          10

Geneva

                 2,570

            3,341

7%

30%

          11

Tokyo

                 2,540

            3,302

6%

30%

          12

Moscow

                 1,760

            2,816

10%

60%

          13

Seoul

                 1,910

            2,674

6%

40%

          14

Zurich

                 2,370

            2,607

3%

10%

          15

Toronto

                 1,500

            2,250

15%

50%

          16

Sydney

                 1,230

            2,091

12%

70%

          17

Shenzhen

                    690

            1,725

12%

150%

          18

Frankfurt

1,710

1,710

-5%

0%

          19

Mexico City

1,220

1,708

2%

40%

          20

Dubai

1,060                

1,696           

12%

60%

Source: New World Wealth

 

 

Wealth flows

The latest data on HNWI migration confirms the strong and growing attraction of Australia, the US and Canada as destinations for the footloose wealthy. Cities such as Sydney and Melbourne top the list of growth markets. The list of cities seeing an outflow of wealth is topped by European centres, with Paris and Rome seeing outflows of 7,000 and 5,000 HNWIs respectively in a year. London remains an outlier in Europe, maintaining an annual net inflow of 500 HNWIs. India and China are large net exporters of wealthy migrants – but with rapid domestic wealth creation, losses here are less concerning than those in Europe.” 

 


Highest net inflows of HNWIs by city

City

Net inflow

Inflow as % of HNWI population

Sydney

4,000

4%

Melbourne

3,000

4%

Tel Aviv

2,000

6%

Dubai

2,000

5%

San Francisco

2,000

2%

Vancouver

2,000

8%

Seattle

1,000

5%

Perth

1,000

4%

 

Highest net outflows of HNWIs by city

Country

Net outflow

Outflow as
% of HNWI population

France

10,000

3%

China

9,000

1%

Italy

6,000

2%

India

4,000

2%

Greece

3,000

5%

Russia

2,000

2%

Spain

2,000

2%

Brazil

2,000

1%

Source: New World Wealth, The Wealth Report 2017 (Pg 19)

Note: All data rounded to the nearest 1,000 and for 12 months to end of 2015.

 

There are increasingly other factors coming into play that could impact wealth flows and movement. This includes greater oversight and tightening global standards on reporting. Even money already held in offshore centres is not immune from greater oversight. These are significant wealth pools: at the end of 2016, the store of private wealth held in offshore financial centres totalled around US$10 trillion. Although only 1% and 6% of private wealth from the US and UK respectively is held in these centres, for the Middle East and Latin America the total is closer to 25%. 

While the rate of growth in wealth held in centres such as Hong Kong and Singapore has averaged 10% annually in recent years, a rash of tax amnesties in preparation for OECD’s Common Reporting Standard (CRS) is persuading some investors to repatriate funds.

 

END

 

Footnote to editors:

 

·         UHNWI: Ultra-high-net-worth individual – someone with a net worth of over US$30m excluding their primary residence 

·         HNWI: High-net-worth individual – someone with a net worth of over US$1m excluding their primary residence

 

To download the report, please visit:


http://www.knightfrank.com/wealthreport 

 

For further information, please contact:

Mr Nicholas Holt, Asia-Pacific Head of Research

 

nicholas.holt@asia.knightfrank.com +86 10 6113 8030 @nholtKF 

 

Ms Rachel Loke, Asia-Pacific Head of Marketing, Communications & Digital

 

rachel.loke@asia.knightfrank.com +65 6429 3587 @knightfrank

 

Ms Denise Nah, Asia-Pacific Public Relations & Communications Manager

 

denise.nah@asia.knightfrank.com +65 6429 3599 @knightfrank

 

Ms Seline Soo, Marketing & Communications Manager, Knight Frank Malaysia

 

seline.soo@my.knightfrank.com +603 2289 9669 @KnightFrank_my

 

 

Notes to Editors

Knight Frank LLP is the leading independent global property consultancy. Headquartered in London, Knight Frank has more than 14,000 people operating from 413 offices across 60 countries. The Group advises clients ranging from individual owners and buyers to major developers, investors and corporate tenants. For further information about the Company, please visit knightfrank.com.