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The World’s New Hotspots
YOU’D think the global credit crunch would be reducing the number of wealthy people around the world, but actually that’s not very accurate. In many developed and emerging economies, especially those benefiting from commodity price rises, their population of high nett worth individuals (HNWIs) is growing quite significantly.
“The common trend is that the rich are getting richer,” said the 2008 Annual Wealth Report, which investigates the wealth and growth of HNWIs with portfolios of between US$1 million (US$1=RM3.25) and US$10 million as well as their attitude towards real estate investment.
The global wealth report produced by real estate consultancy Knight Frank and Citigroup’s Citi Private Bank said the significant growth in the number of millionaires in resource rich countries and emerging economies will continue, and that over half of them will put their money in properties.
Russian, Chinese, Indian, Brazilian and central European millionaires will drive their prime residential markets, the report said, noting that falling property prices in the United Kingdom and United States will not deter them from investing. As a result of the expansion of the middle-class in emerging economies such as Mumbai in India and Warsaw in Poland, it said good quality property is currently in short supply, which has caused prices to rise.
The report added that emerging economies such as those in eastern Asia and eastern Europe as well as commodity rich Russia and Brazil are expected to see substantial growth in the number of millionaires, which will also increase demand for prime property and second homes in key global cities and resorts.
It noted that while global property prices last year increased 11 per cent with the highest capital values for prime residential real estate found in global financial centres such as London, Singapore, New York and Dubai as well as those with benign tax jurisdictions, the top growth performers included some relatively unknown cities.
Among them, Antigua in Guatemala, where prime real estate appreciated 40 per cent and St Jean Cap Ferrat in France with an increase of 39 per cent. In developed countries with abundant natural resources such as Canada and Australia, the report said rising commodity prices will make their impact felt on the prime and superprime real estate segments throughout the world.
On the growth of HNWIs, China recorded the biggest population increase of 14 per cent followed by India with nine per cent and the nations of Kazakhstan, Singapore, the United Arab Emirates and Argentina with eight per cent growth each. In absolute terms, the report said the US has the most number of HNWIs at 3.1 million, followed by Japan with 765,000, the UK (557,000), Germany (375,000) and China (373,000).
Besides HNWIs, the report also studied the mass of affluent people owning assets of between US$100,000 and US$1 million, the ultra high nett worth individuals (UHNWIs) with wealth of above US$10 million, and the elite group with assets exceeding US$100 million.
“We have yet to see the full impact of demand for property from the rising mass affluent populations from central and eastern Europe let alone China, India, South Korea and other Asian economies,” said the report.
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