Sydney ranks 24th in the global high net worth cities as Chinese continue to acquire property: Knight Frank Wealth Report
Sydney ranks 24th in the global cities measured by the number of high net worth individuals, according to the latest Knight Frank Wealth Report. Melbourne was just a few places lower in 28th place.
And Sydney secured a top 10 international cities rating that matters most in the thinking of all HNWIs, coming in at seventh and Melbourne 22nd.
There will be a 37% increase in their number over the next decade. The high net worth individual (HNWIs) is defined as someone with US$30 million or more in net assets.
Their number is set to increase by 50% internationally in the coming decade, with the fastest growth in wealth creation in Asia and Latin America. London and New York are the top locations in the world for wealthy individuals and will remain so until 2023, according to Knight Frank's survey of wealth advisors, whose 15,000 clients have assets worth US $1 trillion.
Price-wise, Sydney came in as the world’s 9th most expensive prime residential property market, with prices averaging $US21,700-$US24,000 per square metre in the 2012 fourth quarter, according to Knight Frank.
Sydney is tipped to continue to attract interest from Asian HNWIs, which Sudhir Vadaketh, senior editor at the Economist Intelligence Unit in Asia, says are more than just voracious consumers.
"They are also savvy investors who see huge potential in prime global property.
"Asians love property," he said, adding there are two reasons to believe that over the next decade Asian HNWIs will become relatively more interested in overseas properties.
"First, portfolio diversification.
"Asian investors are increasingly concerned with macro risks to their domestic economies, after several years of stellar growth.
"These include political issues – such as the standoff between China and Japan over the Diaoyu/Senkaku islands – and policy risks, like further cooling measures triggering a property price correction in cities suchas Hong Kong and Singapore."The second reason is growing comfort levels.
"As more Asian companies expand abroad, so owners and senior managers are becoming more familiar with foreign cultures and business practices, moderating the risk premium hitherto attached to these markets and asset classes."
He suggests the nationalities most likely to venture abroad, in addition to Chinese investors, are from emerging markets such as India, Indonesia, Mongolia, the Philippines and Vietnam.
"Expect HNWIs from frontier markets like Myanmar and Sri Lanka to become more prominent as they seek safe havens for their newfound wealth to mitigate the risk of renewed political tensions at home.
Asian HNWIs will invest in destinations with adequate liquidity, transparency, and an existing Asian population, such as London, Melbourne, New York, San Francisco, Sydney and Vancouver, Sudhir Vadaketh said.
The international Knight Frank property commentator Liam Bailey says in the Knight Frank report that Australian cities do well when it comes to the most contentious indicator within the survey - that of quality of life.
Sydney and Melbourne ranked along predictable northern European and Canadian "cities with an international reputation for providing the ultimate urban utopia."
Zurich comes first, followed by Melbourne, Sydney and Toronto.
"Residents of New York and London might bridle at the thought that such locations can push their own cities into sixth and eighth places respectively, but these towns do have the data to back up their claims to urban bliss, even if they wouldn’t necessarily get the vote of the fashionista or sybarite.
Melbourne is a case in point; the city topped the Economist Intelligence Unit’s most recent global liveability report on the best and worst living conditions around the globe.
"The city scored a near-perfect 97.5%, making it the most liveable of the 140 cities surveyed, only losing points for climate, culture and petty crime.
However, rising temperatures and sea levels are expected to drive up the cost of living in Melbourne over the next few years.
"In fact, a recent report released by the Melbourne Community Foundation identified climate change as one factor that has the potential to have a dramatic negative impact on quality of life in the city by 2030," Bailey noted.
Source: Knight Frank Wealth Report 2013
