“It is therefore a fairly safe bet that the next decade will not see a repeat of the double or even triple digit property price growth we have seen in leading markets over the past ten years.”
What is the Report?
The Wealth Report is a global perspective on prime property and investment published by Knight Frank, a global real estate consultancy firm. The report defines prime property as the most desirable and most expensive property in a given location, generally the top 5% of each market by value. The report emphasizes ultra-wealthy individuals, defined as US$50 million or more in net assets
What Are Key Findings From The Report?
2017 was a banner year for the real estate markets and for the ultra-wealthy. Where are those wealthy individuals and what do they look like?
- Leading with the most ultra-wealthy individuals, North America takes the top spot with 44,000; Asia overtakes the second spot with 35,880; and Europe narrowly finds itself third with 35,180.
- Recent changes in U.S. tax law favor a continued upswing in wealth accumulation. Interestingly, while New York tops the list of ultra-wealthy residents now and predicted into the future, London out-performs for where the ultra-wealthy invest in real estate and have preferred lifestyle elements such as quality universities and luxury hotels, shopping, and restaurants.
- While the majority of the ultra-wealthy have their primary residences in the country from where their wealth is derived, a significant number are globally mobile.
- Top three reasons for luxury investments: (1) joy of ownership, (2) capital appreciation, and (3) safe haven for capital.
- Two key trends in 2017 for luxury residential markets were a big slowdown in China’s top-tier cities: Guangzhou, Beijing and Shanghai; and growth in Europe, including Amsterdam, Frankfurt, Paris and Madrid.
- The top three priciest cities for luxury residential real estate, relative to square meters, were Monaco, Hong Kong, and New York.
What Can I Do As A Result?
- If the ultra-wealthy are not in your database or on your radar, you still have some takeaways from this report: Owning a second home is a reliable indicator of someone who has wealth. For those that do own multiple properties, consider the top three reasons. Use conversation to help you identify whether the second home purchase is purely out of joy and stretches the purse strings, or if your prospects considers it a good investment, which suggests smart financial planning.
- New York and London remain the global hotspots for the ultra-wealthy and in the U.S., real estate ownership and sales are public pieces of information. If you have US$1 million gift prospects, consider these addresses as key indicators of wealth worth verifying.
- While Asia is vying with Europe for the most ultra-wealthy individuals, if your prospects are in China you will want to keep current with government decisions that impact wealth accumulation.
Additional Resources
- Getting Real With Residential Real Estate
- 2018 Doing Good Index | Centre for Asian Philanthropy and Society
- Can You Spot The HNWIs In Your Database?
- Let’s Co-op erate!