Knight Frank: Asia to see fastest growth of ultra-high-net-worth individuals

Knight Frank Malaysia managing director Sarkunan Subramaniam (Photo by Knight Frank)

Knight Frank Malaysia managing director Sarkunan Subramaniam (Photo by Knight Frank)

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KUALA LUMPUR (April 16): Based on its Wealth Sizing Model survey, Knight Frank predicts that the global population of ultra-high-net-worth individuals (UHNWIs) will grow over the next five years with Asia emerging to see the fastest growth by 39%, compared to the global average of 27%. It also forecasts that the number of millionaires will rise by 41% and notes that the interest for post-pandemic investment has increased significantly by 76%.

“The low-interest-rate environment, increase in fiscal stimulus and surge in asset prices have resulted in the world’s UHNWI population increasing by 2.4% higher over the past 12 months,” Knight Frank said in a press statement on April 15.

“Investing in prime residential remains one of the preferred investment priorities for the ultra-high-net-worth individuals (UHNWIs),” it added.

The survey findings came from 600 private bankers and wealth advisors from around the globe representing high-net-worth clients with a combined private wealth of over US$3.3 trillion. Respondents for Malaysia were shared by private bankers and wealth advisers from UOB Private Bank, according to the statement.

Knight Frank Malaysia managing director Sarkunan Subramaniam highlighted that Malaysia saw an 8% increase in high-net-worth individuals (HNWIs) between 2015 and 2020. “Despite the decrease of 8.3% from 2019 to 2020 that was possibly caused by the uncertainties during the pandemic period, we foresee there will be a significant recovery of 36% [in terms of HNWIs in Malaysia] in the upcoming five years.”

Based on the Knight Frank Attitude Survey 2020, the real estate consultancy also noted that 36% of clients in Malaysia reported an increase in wealth in 2020, whereas 28% saw a decrease that same year. In contrast, 65% of clients in Malaysia reported an increase in wealth in 2019.

Despite the 29% fall in the number of clients in Malaysia reporting an increase in wealth from 2020 to 2019, Sarkunan foresees the number will pick up and increase by another 36% from 2020 to 72% in 2021 due to the quick flattening of the infection curve in Asia Pacific that will contribute to the recovery and growth across the region.

Knight Frank Malaysia director of international residential project marketing Dominic Heaton-Watson (Photo by Knight Frank)

Knight Frank Malaysia director of international residential project marketing Dominic Heaton-Watson said Australasia was one of the top-performing regions, averaging at an annual growth of 4.9% due to the surge in pent-up demand as lockdown eased and homeowners re-evaluated their lifestyles. 

“Perth (+4%) was Australia’s frontrunner and remained a popular destination for Malaysian investors, while Sydney (+1%) registered its highest volume of prime sales ever in 3Q2020 — many of which were at Crown Residences at One Barangaroo, Sydney,” he noted.

Heaton-Watson said the survey also revealed that one in five UHNWIs in Asia Pacific is planning to buy a new home in 2021. “The biggest reason being the upgrading of their main residence domestically, followed by a holiday home either domestically or in the US, UK and Australia — three of the five top destinations for Malaysians who also look at overseas education for their children.”

The survey also found that respondents across Asia prefer a home with their offices close by, followed by a home with access to transport links in the urban areas, whereas Australasian buyers who prefer to live in rural or coastal areas are looking at homes with an outdoor space within or nearby, the statement added.

For Malaysian buyers, Heaton-Watson noted that air quality, leisure facilities at home and access to outdoor space nearby are key characteristics they look for.

Wong King Wai