A growing number of the world’s super-rich are choosing to live in more than one country, with many of them parking their substantial wealth in overseas real estate, according to new findings from the Barclays Wealth Insights report, which looked at where the wealthy prefer to live, work, invest and retire.
Around 43 percent of high net worth individuals (HNWIs) have lived in more than one country, revealed the report, adding that they prefer to reside in a small number of destinations.
“At the top of the tree when people look for second homes or citizenship, it tends to be the US, Canada, New Zealand, Australia, the UK, and then Singapore and Hong Kong,” said Liam Bailey, Head of Residential Research, Knight Frank.
Specifically, Singapore has emerged as one of the top destinations for Chinese HNWIs, due to the ease of doing business in the city-state.
Bailey added: “The reality is that more UHNWIs in China are probably making money in China right now. So, for business reasons, they need to be relatively close – that might prevent some of them going further afield.”
The report also noted that many global UHNWIs are putting their faith in property, as they believe it offers more security and better gains.
Recent analysis by Savills showed that between 2008 and 2012, the amount of global private wealth invested in the large-deal (above US$10m) real estate market increased by 111 percent to US$308 billion from US$146 billion, while corporate investment in this sector rose by 43 percent to US$594 billion over the same period.
A lot of investment seems to be coming from Asia, with 28 percent of wealth held by Asian UHNWIs in real estate, compared with just eight percent of wealth held by UHNW Europeans, and six percent of wealth held by North American UHNWIs.
One city that has benefited from this property buying spree is London.
“Much of what’s behind London’s property boom is mobile wealth, and most extremely wealthy people have a place in London that they may use for one month a year,” explained James Faulconbridge, Professor at Lancaster University.
“So it’s a means for them to deploy their wealth and use it as an investment, as well as a functional tool,” he added.
Barclays shared that policy changes in markets such as Hong Kong and Singapore, where new taxes have been imposed on second and third properties, are driving individuals to buy homes abroad.
“As a consequence, investors are looking to divert this investment into real estate assets in other markets, like London and New York,” said Didier von Daeniken, Head of Wealth Management for Asia Pacific, Middle East and Africa, Barclays.
The Barclays report surveyed more than 2,000 HNWIs worldwide, all of whom have more than US$1.5 million in total net worth.
Romesh Navaratnarajah, Singapore Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email romesh@propertyguru.com.sg
