Attention, brokers: The world’s ultra-rich population is growing

Attention, brokers: The world’s ultra-rich population is growing

Wednesday, March 7, 2018

Leonardo DiCaprio in “The Great Gatsby,” 220 Central Park South and a Yacht and Mansion in South Florida

The world’s population of ultra-rich is growing, and their real estate investments are pushing up real estate prices in cities from New York to Guangzhou, China.

According to Knight Frank’s 2018 wealth report, there were 2.5 million people with assets of $5 million or more last year — up 9 percent compared to 2016 and up 20 percent compared to five years earlier.

As for those with $50 million or more? There were 129,730 in 2017, a 10 percent jump from 2016 and 18 percent more than 2012, per Knight Frank. The world’s demi-billionaires — or those with $500 million or more — numbered 6,900 in 2017, up 11 percent from 2016 and 14 percent since 2012.

In the U.S., New York is home to the most high-net-worth individuals — defined as households earning $250,000 or more a year — with 1.167 million hefty earners. That was almost double the figure in Los Angeles, with 637,700 households. New York and LA were followed by Chicago (400,416) and San Francisco (396,431).

According to Knight Frank, the ultra-rich are still investing heavily in real estate. The U.S. remains a safe haven for foreign buyers, who spent $153 billion on U.S. property between April 2016 and March 2017.

But they’re snapping up property elsewhere, and pushing prices up in those cities. The Chinese city of Guangzhou saw the biggest jump in real estate prices — 27.4 percent between 2016 and 2017. That was followed by Cape Town (19.9 percent) and Aspen (15 percent). New York’s prime prices grew 4.6 percent.

Knight Frank’s projections for the next five years shows even more wealth accumulation.

The population of those with $5 million or more is projected to jump 43 percent by 2022, while the number of those with $50 million or more will rise 40 percent and $500 million or more will increase 39 percent, the report found.

Currently, North America is home to the largest share of super-rich — with 34 percent of the world’s wealth concentrated here.

But that’s changing. Over the past five years, the number of ultra-wealth individuals in Asia jumped 37 percent and Europe increased 10 percent. Regions that saw declines in ultra-wealthy citizens include Russia (-37 percent) and in Latin America and the Caribbean (-22 percent).

In the next five years, China’s population of ultra-wealthy individuals is expected to more than double in the next five years, and India’s is expected to skyrocket 71 percent.

Source: The Real Deal