The number of ultra-wealthy people globally is set to grow by 4.2% in 2023, reversing a decline in 2022, according to the latest wealth report from London-based real estate consultancy Knight Frank.
The annual report, released Wednesday, defines “ultra-wealthy” as someone with a net worth of at least $30 million. The total number of ultra-wealthy individuals is 626,619, up from 601,300 a year ago, with the largest proportion in North America, a 7.2% increase over 2022, according to the report.
“The US is a big story,” said Liam Bailey, global head of research at Knight Frank and editor of the report. “Not only is the US a major force in wealth creation, but a third of all new wealthy people projected over the next five years will come from the US.”
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Bailey attributes the reversal to “a recovery in asset prices, led by stocks, gold, Bitcoin and even residential real estate.”
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“The big news is that wealth creation is back,” Bailey said.
At the regional level, the Middle East had the second largest UHNWI population with a 6.2% increase, followed by Africa in third place with a 3.8% increase. Latin America was the only country to experience a decline in its UHNWI population, down 3.6%. At the national level, Turkey led the way with a 9.7% increase in its UHNWI population, followed by the United States with 7.9%, India with 6.1%, South Korea with 5.6%, and Switzerland with 5.2%.
Bailey says increasingly global capital flows may be responsible for some of the change: “Money from Latin America is flowing into US markets such as Miami. Markets such as London and New York still attract the attention of wealthy property buyers, but we are seeing a shift to new markets,” he says.
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“Dubai has emerged as the new global hub in terms of where the world's wealthy want to live and invest. Hubs such as Miami and Milan have also been quite successful in attracting wealthy individuals.”
Bailey says these market developments create a virtuous cycle in which wealthy investors find “opportunities” to invest in commercial property and infrastructure.
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“The wealthy need services where they want them,” he said, noting that Miami has a shortage of quality schools that could be addressed by an influx of wealthy residents. “And commercial real estate is still revaluing, which means there's a big opportunity for well-funded investors to get into the redevelopment and reuse of buildings space.”
Increasing wealth mobility also means governments are moving to “balance the impact of these capital flows”, says Bailey. “In the last 12 months, Singapore has increased stamp duty on foreign property buyers, we've seen the same pattern in Canada with a ban on foreign buyers, and Portugal's foreign investor regime, which encouraged high net worth individuals to buy property, has shifted focus to other investments,” Bailey says, including company formation, the arts and research.
“It's an attempt to balance the influx of wealth with the needs and wants of local people. Wealth is a contentious topic and governments will always try to balance inequalities in some way,” Bailey said.
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At the same time, he says, increasing wealth doesn't necessarily come at the expense of those who are less well off, and it can generate “real economic growth.”
The Knight Frank Wealth Report predicts that the number of ultra-high net worth individuals worldwide will grow by 28.1% by 2028. According to Knight Frank, Asia will lead the way, with high growth expected in India (50%), mainland China (47%), Malaysia (35%) and Indonesia (34%). Europe and Latin America are “expected to be the weakest regions,” the report states.
