MAIN IMAGE: Raising a glass of whiskey in celebration on the launch of the new Knight Frank Wealth Report, is on the left Nick Gaertner, COO Knight Frank South Africa (Residential) and Richard Hardie, CEO Knight Frank South Africa (Residential).
Cape Town is globally one of the cities that is expected to see the highest price growth in 2019 – this is according to the 13th edition of the Knight Frank Wealth report released worldwide on 6 March.
Based on research received from over 60 countries, the report gives insight into where the ultra-rich, that is people worth more than $1 billion (ultra-high net worth individuals (UHNWI)) are spending their money and in what they are investing, particularly trends in commercial and residential property markets.
“South Africa does feature quite nicely through this wealth report,” says Richard Hardie, CEO of Knight Frank South Africa (Residential), with growing interest internationally especially in Cape Town. According to Hardie foreign investors are definitely taking advantage of the exchange rate when buying high-end property here.
The Mother City attracts people who want to buy a second holiday home. “It is a beautiful place to live and you get the second most value per square meter for a million US dollars,” says Nick Gaertner, COO and director of Knight Frank SA (Residential). Sao Paolo in Brazil is rated first for the best value per square metre for a million US dollars.
Along with key European cities, Cape Town, is set to attract the highest growth going into 2019. “We are very much on the map,” says Hardie. According to the report Madrid (Spain), Paris (France), Berlin (Germany) and Cape Town are increasingly popular investment hubs for European and global investors, with a growing number of Chinese buyers.
Despite the economic slowdown globally, the über-rich continue to get richer. The report says 2019 will see the number of people with US$1 million or more in net assets – UHNWI – exceed 20 million for the first time. Just over a third will be based in North America while 5.9 million of them will be in Europe and a further 5.8 million in Asia.
Asian countries will see the biggest growth in UHNWI in the next five years with India in the lead, followed by the Philippines and China. Japan is the biggest UHNWI wealth hub in Asia.
In Africa, Kenia leads the way with a 24% forecast growth by the end of 2023 while South Africa remains the largest wealth hub on the continent.
Of relevance for those considering where to invest in international property, The Knight Frank City Wealth Index predicts London, New York, Hong Kong, Singapore and Los Angeles will grow most in prominence and prosperity in the next five years.
Bengaluru (India), Hangzhou (China), Stockholm (Sweden), Cambridge (England) and Boston (USA) are identified in the report as the five cities that in the future will increasingly attract investors.
Government policies toward foreign property investors, whether introducing favourable tax policies or increasing the hoops to jump through, also affect where the wealthy spend their money. Italy, for instance, brought in a fixed tax payment for wealthy immigrants whereas Singapore, Australia, Canada, New Zealand and the UK are increasing the red tape for foreigners who want to buy property there.
“The wealthy will continue to demand access to global markets, especially as emerging economies see growth rates slow and the search for diversification grows. A record 26% of global UHNWIs will begin to plan for emigration this year, and to help them a record number of countries will offer citizenship and residency through investment schemes,” says Liam Bailey, global head of research at Knight Frank said.
Raise your glass. Rare Scottish single malt whiskey showed a 40% growth in asset value on the Knight Frank Luxury Investment index in 2018.
The full report is available online on https://www.knightfrank.com/wealthreport.
