“How private wealth is shaping property markets globally.”
What is this Report?
The Wealth report is an annual report that looks at how private wealth impacts property throughout the world. It focuses largely on real estate but also talks about luxury items like art, whiskey, and yachts. The report also looks at habits of Ultra High Net Worth (UHNW) individuals.
UHNW is defined as someone with net worth over US$30M. HNW is defined as someone with net worth over US$1 million. Both definitions exclude the primary residence.
What are key findings from the article?
- Wealth continues
to become more global. Ultra High Net Worth Individuals (UHNWIs) are purchasing
additional homes in cities and countries. 36% of UHNWIs have a second passport and
26% of them are planning to emigrate permanently.
- Whiskey
has become a valuable collectable by HNWIs. Expert Sami Robertson sees single
malts taking the place of wine in people’s hearts and pockets. A bottle of The
Macallan 1926, with a hand painted bottle, went for £1.2 million in
November in 2018.
- Knight
Frank reports that “Sales of Scotch whisky to India, China and Singapore rose
by 44%, 35% and 24% respectively in the first half of 2018 according to the
Scotch Whisky Association, with single malts totaling almost 30% of total
exports.” Some HNWIs purchase their own casks, paying six- or seven figures.
Quality Casks are not easily obtained as many distillers hold on to them. Some
companies sell limited numbers to an elite few. The Macallan has an invite only
program with costs starting at £35K.
- While whiskey may be on the rise, the luxury
housing market is slowing down across the world. Prices are growing slowly or
declining. Notably, cities like Manhattan, London, and Vancouver are seeing a
decline. This might reverse those markets to become buyer’s markets.
- Part of
the decline may be due to governments wanting to contain wealth and real estate
in their countries. Governments are starting to implement new taxes to
discourage foreign interests from purchasing real estate. In Vancouver, taxes
are higher for non-residents, subject to an empty home tax, and other
disincentives. Other countries, like China and India, are implementing capital
controls to keep ownership in the country.
What can I do as a result?
How do I identify and connect with HNWIs?
- Talk to
them about their passions. What do they collect? Whiskey might be a new area of
high-end collecting but HNWIs may collect other standbys, such as cars, wine,
and art.
- HNWIs
are going to be even more mobile than before with additional passports and
multiple properties, in spite of government attempts to contain the wealth.
While it may be hard to research and find properties in other countries, guided
conversation can reveal multi-country property ownership.
- Pay
attention to how your prospects’ talk about their future as well as the country
or countries they live in. As wealth restrictions rise, their worldview about
wealth and politics may impact their philanthropic giving.
Additional Resources
- The Wealth Report | Knight Frank 2019
- Where the Super-Rich Go to Buy Their Second Passport | Bloomberg 2018
- Prices of prime properties around the world are falling | The Economist 2019
- The World’s Uber Wealthy, at a Glance | Aspire Research Group 2018
- Can You Spot HNWIs in Your Database? | Jennifer Filla 2017