“How private wealth is shaping property markets globally.”
What is this Report?
The Wealth report is an annual report that looks at how private wealth impacts property throughout the world. It focuses largely on real estate but also talks about luxury items like art, whiskey, and yachts. The report also looks at habits of Ultra High Net Worth (UHNW) individuals.
UHNW is defined as someone with net worth over US$30M. HNW is defined as someone with net worth over US$1 million. Both definitions exclude the primary residence.
What are key findings from the article?
- Wealth continues to become more global. Ultra High Net Worth Individuals (UHNWIs) are purchasing additional homes in cities and countries. 36% of UHNWIs have a second passport and 26% of them are planning to emigrate permanently.
- Whiskey has become a valuable collectable by HNWIs. Expert Sami Robertson sees single malts taking the place of wine in people’s hearts and pockets. A bottle of The Macallan 1926, with a hand painted bottle, went for £1.2 million in November in 2018.
- Knight Frank reports that “Sales of Scotch whisky to India, China and Singapore rose by 44%, 35% and 24% respectively in the first half of 2018 according to the Scotch Whisky Association, with single malts totaling almost 30% of total exports.” Some HNWIs purchase their own casks, paying six- or seven figures. Quality Casks are not easily obtained as many distillers hold on to them. Some companies sell limited numbers to an elite few. The Macallan has an invite only program with costs starting at £35K.
- While whiskey may be on the rise, the luxury housing market is slowing down across the world. Prices are growing slowly or declining. Notably, cities like Manhattan, London, and Vancouver are seeing a decline. This might reverse those markets to become buyer’s markets.
- Part of the decline may be due to governments wanting to contain wealth and real estate in their countries. Governments are starting to implement new taxes to discourage foreign interests from purchasing real estate. In Vancouver, taxes are higher for non-residents, subject to an empty home tax, and other disincentives. Other countries, like China and India, are implementing capital controls to keep ownership in the country.
What can I do as a result?
How do I identify and connect with HNWIs?
- Talk to them about their passions. What do they collect? Whiskey might be a new area of high-end collecting but HNWIs may collect other standbys, such as cars, wine, and art.
- HNWIs are going to be even more mobile than before with additional passports and multiple properties, in spite of government attempts to contain the wealth. While it may be hard to research and find properties in other countries, guided conversation can reveal multi-country property ownership.
- Pay attention to how your prospects’ talk about their future as well as the country or countries they live in. As wealth restrictions rise, their worldview about wealth and politics may impact their philanthropic giving.
Additional Resources
- The Wealth Report | Knight Frank 2019
- Where the Super-Rich Go to Buy Their Second Passport | Bloomberg 2018
- Prices of prime properties around the world are falling | The Economist 2019
- The World’s Uber Wealthy, at a Glance | Aspire Research Group 2018
- Can You Spot HNWIs in Your Database? | Jennifer Filla 2017