The World’s Wealthiest Bet on Real Estate: 48% of their Assets are invested in Property

Published on 2014/10/28

“The Wealth Report 2014” by Knight Frank has just been published. What makes this edition particularly interesting is the fact that – unlike many other wealth reports – it also takes owner-occupied and investment properties into account.

Here are some fascinating facts:

The report’s authors estimate that there are 167,699 ultra high net worth individuals (UHNWI) worldwide. The term is used for people who own at least 30 million US dollars – including real estate.

The following countries have the highest number of UHNWIs:

United States39,378
United Kingdom10,149
PR China7,905

It might come as a surprise that the highest number of super-rich are not at home in Russia or China. Then again, these countries show a particularly large number of billionaires.

Here is the country ranking by the number of billionaires:

United States417
PR China179
United Kingdom94

If you check which cities have the highest rate of high net worth individuals (HNWI), you will find that Singapore and New York City rank at the top:

New York2929
Hong Kong2560

Moreover, the super-rich tend to have places of residence in more than one country, and quite a few consider emigrating elsewhere in anticipation of political or economic woes in their native countries. And where do they prefer to go? To the US (New York City) and the UK (London), more than anywhere else. Unsurprisingly, Russian HNWIs are the ones least content in their country, with many already having left Russia and 37% of the remaining ones wishing to follow suit. Happiest at home, by contrast are Australian billionaires, because nearly all of them (94%) intend to stay right where they are.

HNWIs invest no less than a quarter of their fortunes in property – or better yet: properties – owned outright. On average, they hold 2.7 owner-occupied properties, which account for an average 24% of their assets.

Another 24% of their wealth is committed in investment properties let to third parties. Of these, 68% represent direct investments, while 31% are indirect investments, committed in property funds, for instance. Going forward, 54% of the wealthy intend to raise the real estate share of their portfolios, while 44% intend to keep it unchanged, and only 2% plan to reduce it.

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