Geopolitics, falling markets, and China’s economic malaise seemingly take a toll on numbers even though the prices for luxury residences rose at a higher pace than anywhere else. 

It seems like a four-year decline in the region’s largest equity markets, the geopolitical tension between the US and China, and the mainland’s economic difficulties are exacting a price on the numbers of regional ultra-high-net-worth individuals (UHNWIs).

According to Knight Frank’s 2024 Wealth Report released on Wednesday, the growth in the number of wealthy individuals was a meager 2.6 percent in Asia and 2.9 percent in Australasia.

Regional Laggard

Both those increases lagged the rest of the world. North America ranked first with UHNWI growth of 7.2 percent, followed by the Middle East at 6.2 percent, and Africa (at 3.8 percent).

At an individual country level, Turkey placed first, growing HWNI numbers by 9.7 percent, followed by the US, where growth was 7.9 percent. Asia came back in to focus in third place with India seeing growth of 6.1 percent, followed by South Korea (5.6 percent) and Switzerland (5.2 percent). 

Strong Recovery

Globally, the number of ultra-high net worth rose to 626,619 from 601,300 in 2023 from a year earlier, a 4.2 percent increase. According to the UK-based global real estate consultancy, that «more than» reversed the declines seen in 2022.

Residential prices for luxury properties rose strongly in 2023, according to 100 markets tracked by its Prime International Residential Index (PIRI). Of the total, 80 showed flat or positive trends.

On average, luxury prices were up 3.1 percent. Here the regional order was more in Asia Pacific’s favor, with regional prices up 3.8 percent, besting the Americas (3.6 percent). Europe, the Middle East, and Africa trailed at 2.6 percent.

Dubai and Manila

When looking at individual markets, Manila led the world’s ranking with 26.3 percent growth followed by Dubai (15.9 percent), accentuating the boom that is currently underway in that city, something finews.asia has recently commented on at length.

Investment in commercial real estate fell by half overall, Knight Frank indicated, although high-net-worth individuals only pulled 19 percent of their funding from that sector, decidedly less than public and institutional sources. «In Asia, more than 21% of HNWIs have expressed their intention to increase their investments in commercial real estate in 2023,» the report maintained. 

Art Grows Strongly

Knight Frank also reported that its luxury investment index that tracks the performance of 10 «popular investments of passion» saw art performing the best. with the real estate consultancy saying art prices rose 11 percent in 2023.  «Despite a year of record-breaking sales in the luxury investment market, for only the second time however, the KFLII edged into marginal negative territory with prices down on average 1% across the index,» the report stated.

Jewelry rose 8 percent, watches were up 5 percent, followed by coins (4 percent), and color diamonds (2 percent). The worst performing component of the index comprised rare whiskey bottles as prices for them fell 9 percent.