PRIME property remains very important to the world’s wealthiest people with the demand for luxury homes in cities like London and New York recovering strength last year despite the global recession, according to the Wealth Report by Knight Frank and Citi Private Bank.
The report says that New York and London remain at the head of The Wealth Report's global cities index and property accounts for an average of 35 per cent of the investment portfolios of ultra-high-net-worth individuals (HNWI), second only to investing in their own businesses. However the report found the world's wealthy believe emerging Asian cities such as Shanghai and Mumbai will start to close the gap over the next 10 years.
A number of locations saw property values fall significantly, however, notably Dublin, which experienced a 25 per cent drop in the wealth ratings while Dubai fell 10 per cent. Cities as diverse as Chicago, Los Angeles, Hanoi and Abu Dhabi also suffered with oversupply and falling prices, forcing the readjustment of once booming markets.
The collective wealth of high net worth individuals across the globe shot back up last year by 22 per cent as investment markets rebounded in some locations.
Almost 40 per cent of the 85 prime city and second-home locations in 40 countries that were analysed by the report’s Prime International Index (Piri) rose in value during 2010, 17 of them by 10 per cent or more.
The report’s cities survey saw 14 cities slide down the rankings, with 16 moving up, including eight Asian cities led by Shanghai and Kuala Lumpur. The west was not without success with Munich seeing a resurgence, indicating a renewed confidence in Germany, and San Francisco and Toronto performing well in north America.
Monaco remains the most expensive residential location in the world, followed by London.
The report found that the cities with most appeal to Asian investors are seeing improving fortunes and that schooling and taxes are growing drivers for super-rich property purchases.
However confidence remains shaky among investors. An attitudes survey conducted among 5,000 people worth more than $100 million found that investor concern about the state of the global economy and global political instability has increased.
