The number of dollar millionaires in the UAE has fallen for a second year as Dubai's property downturn and falling stock markets hit investors' wealth, a study shows.
The World Wealth Report from Merrill Lynch and Capgemini found numbers of high net-worth individuals (HNIs), classified as people with more than US$1 million (Dh3.67m) in liquid assets, fell 3.5 per cent to 52,600 last year - even though elsewhere in the world personal wealth has recovered to levels last seen before the global financial crisis.
"The impact here is that real estate plays a big role in the decline," said Tamer Rashad, the head of the Middle East at Merrill Lynch Wealth Management.
But investors were learning their lessons from over-exposure to the property sector during the boom years, he added.
"We've seen high net-worth individuals reducing allocation to real estate … the impact is becoming much softer."
Last year, below average GDP growth also hurt levels of personal wealth, the report said.
In 2009, the number of millionaires in the UAE fell by 19 per cent as a result of Dubai's property crash.
The Asia-Pacific region overtook Europe for the first time in numbers of HNIs.
India overtook Spain to enter the top 12 last year, while China appeared likely to overtake Germany as the third-biggest home of HNIs in the world by the end of the decade.
The US, Japan and Germany accounted for the highest concentration of hyper-rich, but this was being challenged by the ascent of emerging markets, said Karthikeyan Rajendran, the regional sales director at Capgemini.
The numbers of super-rich "will continue to erode if [HNI] populations of emerging and developing markets continue to grow faster than those of developed markets," he said.
The UAE performed poorly compared with Saudi Arabia, which saw an 8.2 per cent increase in the number of HNIs to 113,300.
In the Middle East the numbers of millionaires grew 10.4 per cent to reach 400,000 last year.
Levels of wealth, excluding the effects of inflation, grew at 12.5 per cent to $1.7 trillion.
Kuwait and Bahrain both increased their number of millionaires at rates of more than 20 per cent each. Data for Qatar and Oman were not available.
A sustained rise in oil prices was a contributing factor to greater wealth in a number of Gulf states last year, with Brent crude futures rising 20.2 per cent during the year to $91.80 per contract.
Oil prices continued to rise until peaking in April this year, and have since settled at $110.71 per contract.
A recent report from the Boston Consulting Group pointed to Saudi Arabia as being home to the largest number of households in the world with liquid assets of more than $100m.