Knight Frank, the independent global property consultancy, today launches the 12th edition of The Wealth Report 2018. The report that tracks the burgeoning super-rich population in the world has nearly doubled its reach across 314 cities and comprehensive analysis of 52 countries. The number of ultra-wealthy – those with USD 50mn or more in net assets – rose by 11,630 in 2017, taking the global total to 129,730. Based on responses from more than 500 leading private bankers and wealth advisors across the world the annual report provides a unique perspective on the key factors influencing investments and lifestyle decisions by the world’s UHNWI population.
Key Takeaways – India
- Mumbai ranks 47th on the Knight Frank City Wealth Index among 314 global cities. The index is drawn from four major indicators such as wealth, investments, lifestyle and future
- In terms of wealth alone where in the index measures the number of the UHNWIs, HNWIs and rate of wealth generation in a city, Mumbai ranks in the top 20 with Delhi at 22nd and Bengaluru at 26th positions respectively.
- India’s wealthy population in the prime (USD 5 mn +) category rose to 47,720 individuals between 2016 and 2017 recording 21% growth which is more than double the global average (9%) and one and half times the Asia average (14%). Even in terms of projections the segment in India is expected to increase by staggering 71% between 2017 and 2022, again well above the Asia (61%) and the global average (43%)
- The nation’s affluent class in the super prime (USD 50 mn +) category also grew by 21% between 2016 and 2017, more than double the global average (10%) and above the Asia average of 15%. Between 2017 and 2022 India is expected to add more than 2000 individuals in this category, at a growth rate of 71% again well above the Asia (55%) and world average (40%).
- The superrich in the country belonging to the trophy (USD 500 mn + category) also grew by 18% between 2016 and 2017 marginally above the global (11%) and the Asia average (16%). By the end of 2022 India is projected to have 340 individuals in this category at a growth rate of 70%
- India would be the 3rd largest contributor in Asia with respect to wealthy population after China and Japan
- Mumbai and Delhi would be among the top 10 markets to witness the highest addition in households earning more than USD 250,000 annually between 2017 and 2022
- Mumbai is 16th among the top 20 costliest global cities; USD 1 million can buy only 92 sq. metres
- Staggering 97% respondents that the wealthy population in India saw an increase in their wealth as compared to 88% in Asia and 72% globally.
- Property investments was amongst the lowest (17%) contributing factors that led to increase in wealth amongst Indians, compared to 30% for Asia and 50% globally
- While 95% respondents said that India’s wealthy people increased their investments into equities, 50% said that investments into property dwindled in 2017.
- The investment allocation into property in India (36%) was lower than Asia (39%) and globally (43%)
- Majority of the respondents said that investments in gold (69%) and crypto currencies (71%) were unchanged in 2017.
Dr. Samantak Das, Chief Economist & National Director – Research, Knight Frank India said, “India is one of the major drivers of UHNWI population growth in Asia, which is a bright spot in the global landscape. At 71%, India shall record an accelerated growth in Super Prime population during 2017-2022 compared to an already high 56% growth witnessed in the past 5 years. However, the inclination to invest in property is lower for the ultra-wealthy Indians compared to their global peers. Only 23% wealthy Indians are interested to invest in property (excluding a primary residence and secondary home) in India compared to 43% globally. For those looking to invest outside India, the top choices are UK, USA and UAE. Amongst those willing to commit to property, we have seen a heightened level of interest in the asset class of commercial real estate particularly office and logistics/warehousing on the back of a stream of policy interventions.”
Nicholas Holt, Head of Research for Asia Pacific, Knight Frank Asia Pacific, says, “2017 was a relatively strong year for growth in Asia-Pacific, which has been reflected in the growth in wealthy individuals across the region. Despite global headwinds including a rising interest rate environment, the continued rebalancing of the Chinese economy and tensions around trade, the region is set for further growth in 2018, with wealth increasingly being accumulated through new sources of growth including technology related industries.”