Knight Frank's latest wealth report reveals a 4.2% increase in the global population of individuals worth at least $30 million, reaching approximately 627,000.
However, South Africa experienced a decline of 1.3%, losing 11 ultra-high-net-worth individuals from 2022 to 2023.
Based on input from over 600 financial professionals managing $3 trillion for UHNWI clients, Knight Frank forecasts a 28% rise in wealthy individuals over the next five years, led by India and mainland China.
The report anticipates a shift in interest rates, geopolitical complexities, and technological advancements reshaping real estate investment strategies in 2024.
At the end of 2023 there were 4.2% more UHNWIs than a year earlier, with nearly 70 very wealthy investors minted every day, taking the global total to just over 626,600.
Growth was led by North America (up 7.2%) and the Middle East (6.2%), with only Latin America seeing its number of wealthy individuals fall. While Europe lagged in terms of new wealth generation, the continent remains home to the wealthiest 1%.
Despite global economic slowdown, wealth creation is expected to continue, particularly in Asia, with India and China projected to see significant growth.
According to Knight Frank, the number of wealthy individuals globally will rise by 28.1% during the five years to 2028. "Our model points to strong outperformance from Asia, with high growth in India (50%) and the Chinese mainland (47%) in particular."
Generational changes in investment priorities, emerging wealth hubs challenging established ones, and resilient residential property markets are outlined in the report.
Property
More than a fifth of global UHNWIs are planning a purchase in 2024. "Helpfully, we provide our house price forecast for 25 of the most in-demand markets, led by Auckland (+10%) and Mumbai (+5.5%)," the property group said, adding that the pace of rental growth is expected to slow.
For global markets – politics will replace inflation as the leading market risks, while AI, wellness and climate concerns will shake up the luxury development sector.
Commercial real estate faced challenges in 2023, yet private investors remained active, particularly in living sectors and offices.
Luxury collectibles saw mixed performance, with some sectors experiencing declines while others showed growth, emphasising the need for cautious investment strategies.
The Knight Frank Luxury Investment Index fell 1% over the year, pulled down by falling values in rare whisky (-9%), classic cars (-6%), handbags (-4%) and furniture (-2%).
While art (+11%), jewellery (+8%) and watches (+5%) helped offset some of these falls, our assessment reveals a need for an ever more discerning approach from investors, with significant volatility by sub-market.
Comments