India’s wealthy population records growth of 21%, twice global average: Report

India is expected to become the third largest contributor in Asia with respect to wealthy population after China and Japan, says the report.

Mumbai is ranked 47th on the Knight Frank City Wealth Index among 314 global cities. The index is drawn from four major indicators such as wealth, investments, lifestyle and future. In terms of wealth alone where in the index measures the number of the Ultra high-net-worth individuals (UHNWIs), high-net-worth individuals (HNWIs) and rate of wealth generation in a city, Mumbai ranks in the top 20 with Delhi at 22nd and Bengaluru at 26th positions respectively.

Globally, New York, London, San Francisco, Los Angeles, Chicago and Singapore were the top five cities in The City Wealth Index.

At 54 per cent, India records one of the fastest growths in its Super Prime population (individuals with net worth of USD 50 mn +) between 2012 and 2017; nation to add more than 2000 such individuals at a higher growth rate of 71 per cent by 2022, the report said.

“India is one of the major drivers of UHNWI population growth in Asia, which is a bright spot in the global landscape. At 71 per cent, India shall record an accelerated growth in Super Prime population during 2017-2022 compared to an already high 56 per cent growth witnessed in the past five years. However, the inclination to invest in property is lower for the ultra-wealthy Indians compared to their global peers. Only 23 per cent wealthy Indians are interested to invest in property (excluding a primary residence and secondary home) in India compared to 43 per cent globally.

“For those looking to invest outside India, the top choices are UK, USA and UAE. Amongst those willing to commit to property, we have seen a heightened level of interest in the asset class of commercial real estate particularly office and logistics/warehousing on the back of a stream of policy interventions,” said Samantak Das, Samantak Das, Chief Economist & National Director - Research, Knight Frank India.

The 12th edition of The Wealth Report 2018 says that the burgeoning super-rich population in the world has nearly doubled its reach across 314 cities and comprehensive analysis of 52 countries. The number of ultra-wealthy – those with USD 50mn or more in net assets – rose by 11,630 in 2017, taking the global total to 129,730. Based on responses from more than 500 leading private bankers and wealth advisors across the world the annual report provides a unique perspective on the key factors influencing investments and lifestyle decisions by the world’s UHNWI population.

Prime International Residential Index (PIRI)

Globally, the five cities to top the PIRI included Guangzhou, Cape Town, Aspen, Amsterdam and Seoul. In India, Mumbai was ranked 57^th, New Delhi at 83 and Bengaluru at 84. Mumbai was at 30 last year with Delhi and Bengaluru at 88 and 61 respectively.

The slowdown in prime residential markets has pulled down the top Indian cities in the PIRI rankings, the report said.

The PIRI index takes into account the most desirable and most expensive property in a given location, generally defined as the top 5 per cent of each market by value. Prime markets often have a significant international bias in terms of buyer profile.

Property investments amongst the lowest (17%) contributing factors that led to increase in wealth amongst Indians

Among other trends, property investments was amongst the lowest (17%) contributing factors that led to increase in wealth amongst Indians, compared to 30% for Asia and 50% globally.

While 95% respondents said that India’s wealthy people increased their investments into equities, 50 per cent said that investments into property dwindled in 2017.

The investment allocation into property in India (36%) was lower than Asia (39%) and globally (43%). Majority of the respondents said that investments in gold (69%) and crypto currencies (71%) were unchanged in 2017.

Nicholas Holt, Head of Research for Asia Pacific, Knight Frank Asia Pacific, says, “2017 was a relatively strong year for growth in Asia-Pacific, which has been reflected in the growth in wealthy individuals across the region. Despite global headwinds including a rising interest rate environment, the continued rebalancing of the Chinese economy and tensions around trade, the region is set for further growth in 2018, with wealth increasingly being accumulated through new sources of growth including technology related industries.”