Super Rich Era is coming

Asia is the biggest hub for billionaires, with numbers in the region set to rise above 1,000 by 2023, accounting for more than a third of the world’s billionaire population of 2,696. China in particular has seen a sharp rise in the number of billionaires in the last five years, but growth looks set to moderate in the medium term.

Meanwhile, the ranks of the ultra-wealthy – those with net assets of more than US$30 million – expanded by 7,091 in 2018, a rise of 4%. “Growth in non-financial assets – that is, real estate – has been one of the leading factors driving UHNWI growth,” says Mr Williams. “Other factors include returns from both traditional and alternative investments, along with growth conditions in major economies.

However, growth has been characterised by marked geographical differences, he adds. “In North America, financial assets are a major growth driver at the moment. In Europe and Asia, real estate is most important. Meanwhile, Latin American economies are particularly affected by fluctuations in the US dollar exchange rate.”

Around the globe

In Africa, Kenya leads the way, with 24% forecast growth by the end of 2023. This fits with more upbeat economic forecasts for Kenyan GDP in the coming years, yet risks remain to this economic outlook as the government looks to narrow its fiscal deficit. The number of ultra-wealthy people in the country is set to reach 155 in 2023, making up 6% of the total UHNWI population in Africa.

South Africa will remain the largest wealth hub in the region, with a 32% share of the ultra-wealthy population in five years’ time. Africa as a whole will see its UHNWI population grow by 31% between 2013 and 2023.

In Latin America, the upheavals in the Brazilian economy mean that the UHNWI population will not regain the levels seen in 2014 by 2023, even as the country emerges from recession. However, Brazil will still be the continent’s biggest wealth hub in five years’ time with 3,962 UHNWIs. But strong forecast growth – some 23% between 2018 and 2023 – means that Mexico will be catching up quickly, with a predicted population of 3,427 UHNWIs in five years’ time.

Future forecast

Ten or 15 years ago, UHNWI residential property investment would have been driven largely by where children were to be educated,” notes Andrew Hay, Global Head of Residential at Knight Frank.

“Education is still a key consideration – but UHNWIs are also becoming more strategic in response to global uncertainty and political upheavals, investing in additional homes in cities and countries where they can see greater levels of stability,” he adds.

In the years to come, growing economic and geopolitical challenges – such as rising interest rates, the withdrawal of fiscal stimulus, slowing economic growth and trade tensions, not to mention Brexit and the ongoing upheaval in the Middle East – are set to translate into moderate wealth creation, but also a search among the ultra-wealthy for stability, both personally and in terms of their assets.

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