According to a new report from Altrata, China's strict COVID-19 countermeasures, economic slowdown, geopolitical issues and falling stock prices due to monetary tightening have eroded the wealth of individuals with net worth of more than $30 million, causing the ultra-high net worth population in Asia to decline by about 11% in 2022 – the largest decline anywhere in the world.
Hong Kong, the world's top city for ultra-high net worth individuals (UHNWIs), surpassed New York with 12,615 to New York's 11,845, according to a London-based consultancy that collects and tracks data on the wealthy and influential. But Hong Kong's lead narrowed significantly as its UHNWI population fell 23 percent while New York's grew 2.3 percent.
Singapore saw its ultra-wealthy population increase by 13.4% to 4,160, by far the largest increase among the top 10 cities, putting it in 7th place. Tokyo saw a 27% decrease to 3,710, putting it in 9th place.
Globally, the number of ultra-wealthy individuals fell 5.4% to 395,070, the first decline since 2018 and the biggest contraction since 2015. The total wealth of the ultra-wealthy fell 5.5% to $45 trillion, according to Altrata.
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But this trend is unlikely to continue, with Altrata predicting that by 2027, the number of ultra-rich will grow to 528,100, and their net worth will increase by a third to $60.3 trillion.
“Even by recent standards, 2022 was an extremely volatile year, with renewed war in Europe, soaring commodity prices, pandemic lockdowns in China and rising geopolitical tensions roiling asset markets around the world,” Altrata said in the report. “Surging inflation triggered the first aggressive monetary policy tightening in more than a decade and prompted a major re-rating of risk and reward in capital markets. Bond markets slumped and most major equity indexes posted double-digit declines.”
Hong Kong and New York asset portfolios “were hit by the broader capital market downturn,” the report said, but while the US saw fairly robust consumer spending, government stimulus and limited exposure to external shocks, Hong Kong was hit by “pandemic restrictions, economic weakness, slowing growth in China and the legacy effects of recent domestic political upheaval.”
Asia, which has the second-largest population of wealthy individuals after North America, saw its UHNWI population fall 10.9 percent to 108,370, accounting for 27 percent of the global share. Total wealth fell 10.6 percent to $12.1 trillion, nearly wiping out the gains from the previous year, the report said. By comparison, North America's UHNWI population and the group's total wealth fell about 4 percent, while in Europe both figures fell 7.1 percent.
Over the past decade, the top 10 ultra-high net worth markets were all located in Europe, Asia and North America, but the next decade is likely to see a “moderate shift” with Saudi Arabia, Brazil and the United Arab Emirates showing stronger growth, Altrata said.
The United States maintained its top spot, with the number of U.S. wealthy individuals falling 4.3% to 129,665, but their combined wealth standing at $15.5 trillion. China came in second with a total of $5.3 trillion in assets, down 7.1% to 47,190 ultra-wealthy individuals.
Altrata ranked Hong Kong seventh on its list of ultra-rich countries with assets of $1.5 trillion. Japan was fourth on the list of countries, with 14,940 people owning $1.4 trillion.
