Knight Frank 2020 Global Wealth Report

 
Knight Frank Residential, the largest real estate consultancy firm in the world, in connection with its exclusive partner Douglas Elliman Real Estate, the #1 Brokerage in Manhattan and Miami Beach and top luxury firm in the U.S., released their 2020 Wealth Report, which reflects the global perspective on prime property and investment, including key wealth trends and property hotspots around the world. The Wealth Report examines investment trends covering almost 100 countries and 100+ cities, including what $1M USD buys you around the world.

The Knight Frank 2020 Wealth Report gives our clients insight on what the next 12 months has in store for us based on happenings from 2019. Moreover, the multitude of global economic and political issues continue to be unresolved and have become even more complex in many countries. Nevertheless, we remain optimistic about 2020 because while there may still be challenges, there will be considerable opportunities for many as the markets continue to shift.

In this year’s edition of The Wealth Report, we highlight the residential and commercial markets around the globe that offer great investment opportunities for those looking to purchase real estate. Additionally, what’s even more interesting is that this year’s investment trends are dominated by more virtuous investments than the normal “bling,” some of which include: impact investing, wellness and “ESG” which is an acronym standing for environmental, social and governance.

DOWNLOAD: Knight Frank 2020 Wealth Report

Key Takeaways From The 2020 Wealth Report:

• The global Ultra-High-Net-Worth Individuals (“UHNWI”) population is forecast to rise 27% over the next 5 years, which is an increased prediction from the year prior.
• However, the rapidly changing geopolitical and regulatory environment, along with the shifting societal attitudes toward wealth, will require thoughtful reassessment of what it means to be wealthy.
• The United States dominates the rankings with 240,575 UHNWIs, more than Europe and Asia combined, accounting for almost half the global total.
• Property makes up the largest proportion of investment portfolios held by UHNWIs. Equities comes in 2nd at 23%.
• New York and London remain the most dominant cities for UHNWIs.
• 80% of UHNWIs are dedicating more of their time and money to their own well-being.
• 78 of the 100 prime residential locations we track saw positive or flat price growth in 2019. Miami registered a 2.3% overall growth.
• 21% of UHNWIs are planning to buy a new home in 2020, according to a respondent’s survey.
• In a world of low yield, commercial real estate attracted US$333 Billion of private capital in 2019. Investors are seeking diversification opportunities while becoming highly analytical, increasingly willing to partner for scale and acutely attuned to the underlying sustainability of the assets they hold.
• Although our Luxury Investment Index dipped slightly in 2019, committed collectors continue to pay record prices for the most wanted asset classes. Additionally, philanthropy is arguably the ultimate passion investment and concern for the health of the planet is increasingly driving UHNWI endeavors.

How many square feet/square meters can $1 Million USD buy you in the top luxury markets in the world?

Below is a list of the top 20 luxury market cities worldwide broken down into square feet. Notice Miami’s location on the chart, which shows the value proposition of buying real estate in Miami instead of other top destination cities. For instance, you only get 344 square feet of space in NYC per $1 Million USD compared to 969 square feet in Miami. The value proposition for tropical Miami coupled with the fact that Miami has reinvented itself as a creative tech hub, an international cultural destination, a financial banking hub and a low tax status destination….screams….BUY REAL ESTATE IN MIAMI!

1. Monaco: 172 sq/ft (16 sq/m)

2. Hong Kong: 226 sq/ft (21 sq/m)

3. London: 323 sq/ft (30 sq/m)

4. New York: 344 sq/ft (32 sq/m)

5. Singapore: 377 sq/ft (35 sq/m)

6. Geneva: 409 sq/ft (38 sq/m)

7. Los Angeles: 420 sq/ft (39 sq/m)

8. Paris: 484 sq/ft (45 sq/m)

9. Sydney: 538 sq/ft (50 sq/m)

10. Shanghai: 624 sq/ft (58 sq/m)

11. Tokyo: 700 sq/ft (65 sq/m)

12. Beijing: 732 sq/ft (68 sq/m)

13. Berlin: 829 sq/ft (77 sq/m)

14. Miami: 969 sq/ft (90 sq/m)

15. Melbourne: 1,033 sq/ft (96 sq/m)

16. Mumbai: 1,098 sq/ft (102 sq/m)

17. Istanbul: 1,1238 sq/ft (115 sq/m)

18. Dubai: 1,668 sq/ft (155 sq/m)

19. Cape Town: 1,873 sq/ft (174 sq/m)

20. Sao Paulo: 2,174 sq/ft (202 sq/m)

Relative Values of Top 100 Prime Cities

Objects of Desire for 2020 Go Hand-In-Hand With the Top Sales of 2019

Below is a graph highlighting the top objects of desire in on DE | KF’s Luxury Investment Index, which shows that rare whiskey has grown in value the most over the last 10 years at +564% and increased by +5% in the past 12 months, while Hermes handbags prove their worth in the luxury market with a +13% growth in values over the past 12 months.

Objects of Desire

Further, future trends are generally forecasted based on the past, so it is important to note that in 2019, there were some eye-catching and surprising auction sales that took place. For instance, a 1986 stainless-steel sculpture of a rabbit by Jeff Koons broke the auction record for any work by a living artist when it was sold in May for over US$ 91 Million. Check out the infographic below to see more!

Most Wanted

If you are interested in learning about the local real estate market in Miami or Miami Beach, please contact Broker Michael Light. Michael is the Senior Director of Luxury Sales at Douglas Elliman Real Estate, a member of the exclusive Sports & Entertainment Division at Douglas Elliman and a Global Agent for Knight Frank Residential. You may reach Michael directly at (786) 566-1700 or michael@miamiluxuryhomes.com.