THE global ultra-high-net-worth individual (UHNWI) population is forecast to increase 22 per cent over the next five years. This means by 2023, there will be additional 43,000 people in the world with net worth of more than US$30 million (RM124.16 million).
Strong economic performance in Asia, which hosts eight of the Top 10 countries with the fastest-growing UHNWI population, will push the number of millionaires (with net worth in US dollar) globally to exceed 20 million for the first time.
According to data prepared exclusively for Knight Frank’s The Wealth Report 2019, the number of billionaires from the Asian region will rise 27 per cent, surpassing growth in North America (17 per cent) and Europe (18 per cent), reaching 1,003 by 2023 — more than a third of the world’s total billionaire population of 2,696.
Echoing the trend seen in previous editions of The Wealth Report, Asian countries are expected to see the fastest growth in the number of UHNWIs in the period between 2018 and 2023.
Of the 59 countries and territories in Knight Frank’s forecasts, eight of the Top 10 countries by future growth are in Asia.First in rank is India, which would see a 39 per cent change in UHNWIs to an estimated 2,697 by 2023, from 1,947 last year. The Philippines is next — it is expected to see a 38 per cent change to an estimated 296 by 2023, from 215 last year. Malaysia is in sixth position, with UHNWIs increasing 36 per cent to 830 by 2023.
ASIA PACIFIC PREFERRED MARKET
Knight Frank said overall, Asia-Pacific UHNWI investors still prefer to invest in their local markets.
According to the wealth managers surveyed, 71 per cent of their clients from Taiwan and 68 per cent from Australia have domestic property investments.
For 2019 to 2020, 43 per cent of clients from South Korea, 41 per cent from Malaysia and a similar proportion in the Philippines plan to invest in their home country.
For those looking to invest in property (excluding first or second homes) abroad, Australia is the most popular choice, with 41 per cent of the wealth managers indicating that their clients may invest Down Under this year or next year.
The UHNWI clients’ second choice is the United States and third, the United Kingdom.
According to the survey, around one in three from China (31 per cent), Malaysia (33 per cent) and South Korea (32 per cent) are likely to invest overseas.
On the percentage of clients who have property investments (excluding first and second homes) outside their country of residence, 40 per cent of the managers indicated Malaysians, 39 per cent (Indonesians) and 39 per cent (Hong Kong).
ASIA-PACIFIC PRIME RESIDENTIAL MARKET
Overall, luxury home prices in Asia Pacific gained 2.7 per cent with most markets experiencing low, yet steady growth. However, growth in the region was still higher than the global average.
Last year, the prime international residential index (PIRI 100) had recorded its lowest rate of annual increase since 2012 as the value of prime residential markets around the world rose by only an average 1.3 per cent, down from 2.1 per cent in 2017. The index sees an annual price change of one per cent in Malaysia’s luxury residential market from December 2017 to December 2018.
“The slowdown in the PIRI 100 last year was a consequence of increasing global interest rates. As ultra-low interest rates have driven the global real estate markets since 2008, it is inevitable for the markets to experience lower price growth amid the shift in monetary policy,” said Nicholas Holt, Knight Frank Asia Pacific head of research.
In terms of the cost of prime residential real estate, Hong Kong is the second-most expensive market in the world. Every US$1 million (RM4.13 million) spent buys only 22 square metres (sq m) of luxury property in the territory. Singapore, with 36 sq m, is the fifth most costly place to buy prime residential property while Sydney is at eighth place (52 sq m) and Shanghai at tenth (57 sq m).
SUPER RICH IN MALAYSIA
The Wealth Report showed that about 59 per cent of the Malaysian respondents reported an increase in client wealth.
Malaysia’s wealth advisers said they are optimistic, with 78 per cent of them expecting their clients’ wealth to grow this year. They said wealth would grow although continued market volatility would pose potential challenges to wealth creation and protection.
Wealth managers in Malaysia are significantly more optimistic about their clients’ prospect for growing and preserving wealth this year compared to last year.
Around 22 per cent of wealth managers felt that the political and economic environment in Malaysia would make it easier for their clients to create and protect wealth this year, compared with just 11 per cent last year.
This findings place Malaysia almost on par with India and the Philippines, which are the top-performing markets in Asia.
Knight Frank Malaysia managing director Sarkunan Subramaniam said: “It is interesting to know that wealth managers in Malaysia felt that the 2019 political and economic environment will make it easier for the UHNWIs to create and protect wealth. This has to be associated with... the confidence in the present government.”
