Understanding global wealth trends and how they shape buying decisions of the wealthy is a good gauge for budding investors to know where they should put their money. Now on its 13th year, Knight Frank 2019 Wealth Report tracks, assesses, and reports on the capital movements of the world’s wealthiest people to identify how their decisions influence the global market.
Here are some of the important points from the report:
Global Wealth Trends
- For the first time ever, the number of millionaires around the world will surpass 20 million in 2019.
- Asia is a hub for billionaires. By 2023, their number will exceed 1,000, more than a third of the total billionaire population of 2,696. The city with the most billionaires is New York with 94. Private investment is still huge in most North American cities, with New York City clinching the top post. London is also strong in terms of diverse investors.
- In 2018, there are 200,000 UHNWIs (ultra-high net-worth individuals with a net worth of more than $30 million), representing a 4% growth. India leads the number with an expected growth of 39% over the next five years. The Philippines is a close second.
- Existing UHNWIs see a wealth increase in the next year, with great confidence noted in the US. In Latin America, Brazil remains as the biggest wealth hub with 3,962 UHNWIs.
- Global variations exist with geographical differences. In Europe and Asia, real estate is the major growth driver whilst for North America financial assets remain the top moneymaker. Some areas such as Latin American economies still heavily rely on movements in the US dollar exchange rate.
Property Market and Investment Update
- Global property markets will show a shift in the next 12 months as investors and buyers become wary of the global economic uncertainties.
- The PIRI 100 posted an annual rate growth of only +1.3%, the lowest in six years. Manila bested all other cities in the PIRI 100 with an annual growth of 11%.
- Whilst the US is still the world’s most mature multi-housing market, Europe is gaining momentum.
- The areas of Berlin, Cape Town, Paris, and Madrid lead the prime residential growth with a 6% forecast. Commercial property investment is on the rise since 2010. Investors are keen on diversifying their portfolio are drawn by the secure income and the ability to manage the asset actively.
- Property investors can benefit greatly by zeroing in on residential properties located in Delray Beach, Florida, Boston’s Seaport District, and Pasadena.
Investments of Passion Round-Up
- Whiskey topped the 2018 Investment Index with an annual growth of 40%.
- Wine collectors will still purchase from budding and upcoming Burgundy and Piedmont producers owning the vineyards in the best locations.
- When it comes to diamond colour, blue diamonds take the cake. Pink diamond prices remain stable whilst yellow diamonds dropping slightly.
- The rising popularity of blockchain provides investors with a viable system for the fractional ownership of unique collectibles. Codex Protocol allows its members to keep a record of details like ownership, provenance, and appraisal notes through the use of blockchain thus creating a more efficient market.
- Investment Index for rare classic cars appreciated by as much as 2.5% last year alone. However, not all appreciated, with Porsche falling at an average of 6.5%.