The global population of ultra-high-net-worth individuals (UHNWIs) declined by 3.8% in 2022, after a record climb of 9.3% in 2021. Despite the fall however, several growth hubs remained both at a regional and country level as well as across wealth bands – billionaires, UHNWIs and high-net-worth individuals (HNWIs), according to the latest issue of The Wealth Report 2023 by Knight Frank.
READ: 17 key global real estate trends and how best to leverage them
Nick Gaertner, Director and COO of Knight Frank South Africa says: "Despite the ongoing challenges that Africa and South Africa face, it is still a place that is clearly presenting great opportunities for the UHNWI. The last 12 – 18 months has proved a significantly challenging economic environment world-wide, and while it is easy to highlight the flaws within South Africa, it is a country that provides a huge amount of business and investment opportunity, of which UHNWI are clearly managing to take advantage of more so than in most first world and developed countries.
"Along with issues, comes the opportunity to create solutions and promote rapid business growth, which is something that UHNWI are most likely leveraging from."
READ: Adapting to changing demographics and lifestyles: Navigating SA's evolving property market
Highlights:
The Middle East was the regional stand-out with the number of UHNWIs growing by 16.9%
- Africa also proved resilient with 6.3% growth in UHNWIs
- Three of the top 10 fastest growing UHNW markets were in Asia with Malaysia, Indonesia and Singapore seeing their wealth populations expand by 7-9%, this comes despite the wider region experiencing a 6.5% decline
- Over the next five years, Knight Frank forecasts that the global UHNW population will expand by 28.5% to almost 750,000 from 579,625 in 2022
Liam Bailey, global head of research at Knight Frank says: "The fall last year in the total number of UHNWIs globally was due in large part to the weak performing equities and bond markets. On the flip side however, 100 prime residential markets globally saw average price growth of 5.2% and luxury investment assets grow 16% which helped steady the decline. The dip is just that. Taking the longer view, the global UHNW population grew by 44% in the five years to 2022 and, although we forecast growth to slow to 28.5% over the next five years, the recent dip will prove short lived as we adapt to a new economic environment."
Breaking it down:
The Middle East was the standout region with 16.9% growth in UHNWIs (those with US$30m+ in net assets) in 2022. The UAE was the fastest growing country with an 18.1% increase, bringing the number of UHNWIs to 1,116. Saudi Arabia was not far behind with 10.4% annual growth.
Africa also proved resilient with 6.3% growth in UHNWIs, whilst Australasia and the Americas remained largely static with 0.7% and 0.2% growth respectively. Asia’s UHNWI population fell by 6.5% yet three of the top 10 highest growth markets were held by Asian countries – Malaysia, Indonesia and Singapore saw their wealth populations expand 7-9%.
Europe was the hardest hit region with declines of 8.5% in the number of UHNWIs. Four-fifths of the region’s countries experienced a decline in their UHNWI population. Of the handful of markets seeing their UHNW population increase were Ireland with 3.9% rise and the wealthy safe haven of Monaco with 0.9% growth.
While the UHNWI population contracted last year, the number of high-net-worth individuals (HNWIs), those with US$1m or more in net assets, expanded by 2.9% to almost 70 million worldwide. The top three countries for HNWI growth were Malaysia, Brazil and Indonesia.
The number of billionaires declined by 5% to 2,629 worldwide.
Looking ahead
Over the next five years, Knight Frank forecasts that the global UHNWI population will expand by 28.5% to almost 750,000 from 579,625 in 2022. This expansion marks a slowdown from the 44% growth seen between 2017 and 2022. The number of HNWIs is expected to grow by 56.9% and surpass 100 million over the next five years.
The top 10 locations for forecast growth are dominated by European and Asian economies. Hungary is expected to come out top with 75% growth in their HNW population, followed by Turkey (70%) and Poland (67%). However, the US will retain its dominance with the largest global HNW population, which is forecast to increase by 24.6%.
The 1%
Within the latest update of The Wealth Report, Knight Frank has identified the level of net individual wealth it takes to reach the 1% threshold across the world. This varies sharply from country to country but to access ‘the 1%’ falls well short of Knight Frank’s definition of an UHNWI – somebody whose net wealth exceeds US$30 million.
Even in Monaco, which has the world’s densest population of super-rich individuals, the entry point for the principality’s branch of the 1% is US$12.4 million. That level is still almost double that of second place which is held by Switzerland (US$6.6m). Australia rounds off the top three with US$5.5m, with New Zealand and the US sitting in fourth and fifth with US$5.2m and US$5.1m respectively required.
For Asia, Singapore has the highest threshold with US$3.5 million required to be in the top 1% ahead of Hong Kong’s US$3.4m. For the UAE, Middle East’s highest entry, the level required is US$1.6m and Brazil comes top of Latin American markets with a US$430,000 threshold.
Flora Harley, partner, Knight Frank Research says: "All of these levels have risen since Knight Frank last published the analysis in The Wealth Report in 2021, reflecting the growth in wealth over the past two years, despite the dip in 2022. However, as explored in that edition, the growing inequality globally could see a greater focus on this group – particularly in the sights for greater taxation on assets and even emissions."
Want all the latest property news and curated hot property listings sent directly to your inbox? Register for Property24’s Hot Properties, Lifestyle and Weekly Property Trends newsletters or follow us on Twitter, Instagram or Facebook.
