This article is from the Australian Property Journal archive
THE number of Ultra-High-Net-Worth Individuals (UHNWIs) fell by 3% in 2015, the first annual decline since the global financial crisis in 2008, according to Knight Frank.
UHNWIs are defined as those with US$30m or more in net assets. In 2015, almost 6,000 people dropped out of the UHNWIs wealth bracket. Despite the decline, there are now 187,468 UHNWIs globally, which is a 61% rise from 116,800 recorded a decade ago. By 2025, the global population of UHNWIs is set to rise by 41% to 263,483; growth is set to be significantly slower than the previous 10 years.
Asia tops the absolute increase in UHNWI population among the world regions, both in the last 10 years and in the next 10 years.
In Australia, the number of UHNWIs rose by 135% (from 1,281 to 3,010) in the past 10 years, although growth is set to slow to 35% over the next decade, with the forecast number of UHNWIs anticipated to reach 4,064 by 2025.
Sydney has entered the top 10 list, taking the eighth position of most important cities for UHNWIs in 2016 – rising from 14th position last year.
CEO Stephen Ellis said in Australia, the strong increase was due to changes in sources of wealth, including technology, healthcare and pharmaceuticals, and strong growth in the property sector.
“However, this level of growth in numbers of UHNWIs in Australia is anticipated to slow over the next decade to 35%, and we have already seen a slowdown of 2% during 2015. In Australia, the biggest concerns UHNWIs have in regard to wealth creation and preservation over the next 10 years include stock market volatility, the global economy, and the issues that come with succession and inheritance,” Ellis said.
According to Knight Frank, Australia is expected to make up 6% of the 73,000 UHNWIs in the Asia Pacific region in 2025. Currently, Australia makes up 7% of the 45,000 UHNWIs in the region.
Head of research Australia Matt Whitby said of the 19 countries tracked within Asia Pacific, 12 saw their UHNWI populations fall in 2015, principally as a result of global macro-economic events, including the Chinese slowdown, the fall in the price of oil, volatile equity markets and the strengthening of the US dollar.
“Looking at a longer time horizon however, Asia especially has been fertile ground for the growth in the number of UHNWIs, with more individuals surpassing the US$30m barrier than in any other region over the last ten years.
“Much of this newfound wealth in Asia has had an impact on the age profile of Asia’s wealth brackets, reflecting the recent nature of the growth and opportunities in these markets. The average age of populations with $10m or more in net assets is a case in point, with Chinese individuals in this bracket on average 10 years younger than their Swiss counterparts,” Whitby said.
Wealth distribution (UNHWI populations 2005, 2015, 2025)
| World region | 2005 | 2015 | Absolute increase (2005-2015) | 2025 | Absolute increase 2015-2025) |
| Asia | 17,531 | 41,072 | 23,541 | 67,999 | 26,927 |
| North America | 51,934 | 69,283 | 17,349 | 90,247 | 20,964 |
| Europe | 32,073 | 46,191 | 14,118 | 58,465 | 12,274 |
| Middle East | 4,712 | 8,910 | 4,198 | 13,763 | 4,853 |
| Russia & CIS | 2,039 | 6,105 | 4,066 | 10,517 | 4,412 |
| LatAm& Caribbean | 5,279 | 9,492 | 4,213 | 13,380 | 3,888 |
| Australasia | 1,630 | 3,795 | 2,165 | 5,179 | 1,384 |
| Africa | 1,602 | 2,620 | 1,018 | 3,933 | 1,313 |
| Global | 116,800 | 187,468 | 70,668 | 263,483 | 76,015 |
Source: New World Wealth, The Wealth Report 2016
Australian Property Journal
