Number of ultra-wealthy people in GCC to rise 26% over next five years

Rate of wealth creation in the region to remain strong, Knight Frank report says

U.S. one-hundred dollar banknotes are arranged for a photograph in Hong Kong, China, on Monday, April 15, 2019. China's holdings of Treasury securities rose for a third month as the Asian nation took on more U.S. government debt amid the trade war between the world’s two biggest economies. Photographer: Paul Yeung/Bloomberg
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The number of ultra-high net-worth individuals in the GCC region is expected to climb 26 per cent in the next five years to over 9,100, according to the latest Wealth Report from consultancy Knight Frank.

“The rate of wealth creation in the GCC region is expected to remain strong,” said Taimur Khan, associate partner of Knight Frank Middle East.

“Over the next five years, we expect the number of HNWIs (high net-worth individuals) to increase by 12 per cent on average and UHNWIs (ultra-high net-worth individuals) by over 26 per cent over the same period,” he added.

Some 57 per cent of these UNHWIs will be based in Saudi Arabia and 23 per cent from the UAE.

Knight Frank defines HNWIs as those who possess a net wealth of $1 million (Dh3.67m) or more (including primary residences and second homes not held as investments) while UHNWIs are those with a net wealth of $30m or more.

The number of ultra-wealthy people globally is predicted to grow 27 per cent in the next five years to just under 650,000, the data showed.

Asia is expected to generate more new UHNWIs than any other region — growing by 44 per cent — followed by Africa (32 per cent), Australasia (30 per cent) and the Middle East (17 per cent). Russia and the Commonwealth of Independent States are expected to see a 23 per cent growth of UNHWIs, Europe 23 per cent, North America 22 per cent and Latin America 17 per cent.

In terms of the number of ultra-wealthy individuals, the US dominates with 240,575, followed by China with 61,587 and Germany with 23,078. Saudi Arabia, with 5,100 ultra-wealthy individuals, is ranked 16th.

“Knight Frank predicts that by 2024, Asia will be the world’s second-largest wealth hub, outperforming Europe,” said Liam Bailey, global head of research at Knight Frank.

“However, even after such a steep rise, it will remain half the size of North America’s UHNWI population, which is predicted to increase by 22 per cent over the same period.”

There were a total of 513,244 UHNWIs in 2019, an increase of 6.4 per cent. Property makes up the largest proportion of investment portfolios held by ultra-wealthy individuals, followed by equities.

“It’s exciting to see how wealth is developing across Asia and, with the number of ultra-wealthy in India, Vietnam, China and Malaysia outpacing many other markets over the next five years, it will be interesting to see how this impacts the global property market,” added Mr Bailey.

Of the top 20 fastest-growing countries for UNHWIs presented in the report, six are located in Asia, led by India with 73 per cent growth, five are in Europe, led by Sweden with 47 per cent growth and three in Africa, led by Egypt.