Knight Frank Global Head of Residential Lord Andrew Hay said the number of global high net worth individuals - those with $30m plus in net assets - rose by 6,340 in 2016, taking the global total to 193,490 people, and said that since the global financial crisis in 2008, the world’s wealthiest people have shifted their focus from the size of returns to the safety of their capital with a keen eye planted on Australian property.
“The personal safety of people in positions of wealth is increasingly being targeted as inequality grows. Property remains a target for outbound capital and our Attitudes Survey revealed 32% of UHNWIs globally will invest in offshore residential property in the next two years.”
Knight Frank's Global Residential Head Lord Andrew Hay. Source: TwitterOn a trip to Australia, Lord Hay discussed the spending trends and issues of importance to the world’s super-wealthy, including the growing significance of Australia as an investment proposition for the world’s richest. Notably, that:
“Countries that offer a fiscal and political ‘safe haven’, as well as excellent quality of life, are expected to see strong growth over the next decade in UHNWI populations – and saw their numbers increase in 2016. Australasia, Canada, Malta, the UAE, Qatar, Monaco and Israel are examples of key ‘safe havens’ attracting migrating UHNWIs," said Lord Hay.
“Australia is a key focus internationally for the super-rich. Sydney and Melbourne have made it into the top 10 list of most important cities globally for the wealthiest to invest, according to the Knight Frank City Wealth Index
. Sydney ranked 4th and Melbourne ranked 10th in the ‘investment’ category.
“The value of the world’s leading prime residential markets recorded slower growth in 2016. On average values rose by 1.4% in 2016, compared with 1.8% in 2015. The top tier of price growth in prime residential markets is being driven by Australia, China, New Zealand and Canada.”
Lord Hay said that the increase in the ultra-wealthy population globally has occurred despite ongoing political and economic uncertainty around the world having more of an impact on future trends.
“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.”
Over the next 10 years, key developments attracting global wealth into Australia will include Crown Sydney, One Sydney, One Sydney Harbour and Melbourne’s One Queensbridge.
“Properties such as these offer a new investment proposition for inbound global wealth," Lord Hay said.
There are numerous factors that have continued to bolster wealth growth despite growing political and economic uncertainty, he said.
“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. There may be widespread uncertainty, but there are also strong fundamentals in many economies, with signs of real progress being made around regulation and policy which will help economic growth to flourish in some places.”