Despite global political and economic uncertainties in 2016, the population of the ultra-high-net-worth Individuals—defined as those with $30 million or more in net assets—grew by 6,360 to 193,490, reversing a 3% decline in 2015, according to a report released Wednesday by real estate consultancy Knight Frank.
"The momentum gained in wealth creation in 2016, although relatively modest, was far from being a foregone conclusion, especially given that nearly three-quarters of respondents to our Attitudes Survey highlighted political uncertainty as a significant threat to their clients’ availability to create and preserve wealth," Grainne Gilmore, head of U.K. residential Research at Knight Frank, said in the 11th edition of The Wealth Report.
The report covered trends in global wealth, property investment and luxury spending by the ultra-wealthy. One part, The Attitudes Survey, is based on responses from nearly 900 of the world’s leading private banker and wealth manager.
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Other key findings about ultra high-net-worth individuals include:
By 2026, the world’s ultra-wealthy population will reach 275,740, a 43% increase
Asia is starting to challenge the U.S. in terms of the largest regional population of ultra-high-net-worth individuals
Vietnam is expected to see the fastest growth in their population by 2026
32% will invest in cross-border real estate in the next two years
London, New York and Hong Kong are the most important cities for the ultra wealthy
Asia Pacific Drives Global Wealth Growth
Over the next decade, the world’s wealthiest population is projected to increase 43%, according to the report, citing data by New World Wealth, a wealth intelligence and market research company based in Johannesburg, South Africa.
"One key influence on income in 2016 has been the performance of stock markets in dollar terms. In many countries this was much stronger in 2016 than in 2015," Andrew Amoils, head of research at New World Wealth, said in the report.
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The U.S. and Canada are expected to see a 31% increase in their population of ultra high net worth individuals over the next 10 years. During the same period of time, though, Asia Pacific is expected to rise 91%, led by Vietnam, Sri Lanka, India and China.
Currently, there were 46,080 ultra-high-net-worth individuals in the Asia Pacific region, 27,020 fewer than the North America. But by 2026, the difference is predicted to shrink to 7,068.
Vietnam has seen the biggest growth in its ultra-wealthy population during the last 10 years and is forecast to continue its top position from 2016 to 2026, with a 170% increase in the population of those worth at least $30 million.
China’s ultra-wealthy population grew 281% in the 10 years leading up to 2016. There are 14,310 individuals with $30 million or more in net assets. The population will increase 140% over next decade, according to Knight Frank.
London, New York, Hong Kong Are in for Ultra Wealthy
About 32% of the ultra-wealthy plan to invest in international properties in the next couple of years, according the report.
Considering four factors—current wealth, investment, connectivity and future wealth—Knight Frank’s City Wealth Index identified London, New York, Hong Kong, Shanghai and Los Angeles as the top five cities for the ultra-wealthy.
| The Knight Frank City Wealth Index 2017 | |||||
| Ranking | City | Wealth | Investment | Connectivity | Future |
| 1 | London | 2 | 1 | 1 | 2 |
| 2 | New York | 1 | 2 | 2 | 1 |
| 3 | Hong Kong | 3 | 8 | 6 | 4 |
| 4 | Shanghai | 7 | 13 | 3 | 3 |
| 5 | Los Angeles | 5 | 3 | 10 | 8 |
| 6 | Singapore | 9 | 7 | 7 | 6 |
| 7 | San Francisco | 4 | 6 | 13 | 7 |
| 8 | Beijing | 6 | 23 | 4 | 5 |
| 9 | Tokyo | 10 | 16 | 5 | 10 |
| 10 | Chicago | 12 | 9 | 17 | 17 |
| Source: Knight Frank |
"The global economic powerhouses of London and New York dominate the rankings due to their well-established lead over other cities," said Liam Bailey, head of global research at Knight Frank. "However looking ahead, future wealth concentrations and investment firepower look set to be dominated by a tussle for supremacy between Asian and North American cities."
Last year, luxury house prices in Chinese tier-1 cities, including Shanghai, Beijing, Shenzhen and Nanjing, saw the fastest appreciation globally, according to the Knight Frank report.