March has seen Knight Frank publish The Wealth Report 2021, its flagship guide to global wealth and investment.
Its 15th edition provides an up to date insight into wealth distribution, the threats and opportunities for wealth, commercial property investment opportunities, philanthropy and luxury spending trends. The report is also recognised as the ultimate guide to prime property markets and looks at the performance of 100 of the world’s most sought-after prime residential property markets. Liam Bailey, Knight Frank’s Global Head of Research, highlights key findings in his top takeaways:
UHNW Population Grows
With low global interest rates and more fiscal stimulus, asset prices have surged. The world’s UHNW population has grown by 2.4% to more than 520,000 in the last 12 months.
Knight Frank’s assessment of the world’s leading prime residential markets confirms that average price growth accelerated over the past 12 months. Auckland led the way with an 18% rise, reflecting New Zealand’s successful handling of Covid-19. Those markets hit hard by the pandemic are also seeing growth. Low mortgage rates, a search for space, privacy and changing commuting patterns are helping push prices higher.
Property Forecast for 2021
The Attitudes Survey reveals that 26% of UHNWIs are planning to buy a new home in 2021, with the biggest driver the desire to upgrade main residences. The survey points to a growth in demand for rural and coastal properties, with access to open space the most highly desired feature.
The pandemic is supercharging demand for locations that offer a surfeit of wellness – mountains, lakes and coastal hotspots. Knight Frank believes demand for these types of locations will help fuel price rises of up to 7% in key markets this year.
Despite logistical challenges, investors continued to drive values higher for key collectible assets over the past year – led by handbags (+17%), fine wine (+13%) and classic cars (+6%).
With some auctions on hold and many art fairs cancelled as a result of the pandemic, there was a contraction in art sales, with disruption to this global market likely to continue through the first half of 2021. But online sales doubled in value compared to 2019, and The Wealth Report suggests that the second half of the year should provide a longer-term view of the direction for investment performance.