The Wealth Report 2017
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The Wealth Report provides a unique perspective on the issues that are influencing UHNWI investment and lifestyle decisions.
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The Wealth Report 2017
- 2. INDIA INSIGHTS Dr. Samantak Das Chief Economist & National Director – Research
- 3. • India has 2% of the world’s millionaires (13.6 mn), and 5% of the world’s billionaires (2,024) • UHNWIs increased by 12% between 2015-16 and is forecasted to grow by 150% during 2016-26 • The number of UHNWIs in India increased by 290% during the last decade • India ranks 6th in UHNWI growth rate for 2016, to move up to 3rd rank for the next decade
- 4. INDIA STATISTICS Millionaires ($1m+) 264,300 Multi-millionaires ($10m+) 16,580 UHNWI ($30M+) 6,740 $100M+ 851 $1bn+ 95
- 5. CITY-WISE WEALTHY INDIANS 2016 Mumbai leads in number of UHNWIs, Pune ahead in growth UHNWI ($30M+) Change 2015-2016 Change 2016-2026 Pune 140 18% 170% Hyderabad 260 15% 160% Bangalore 220 15% 160% Mumbai 1,340 12% 150% Kolkata 280 10% 140% Chennai 190 10% 140% Delhi 680 10% 140% Gurgaon 110 10% 140%
- 7. TOP 5 FACTORS MOST IMPORTANT FOR - MANAGEMENT OF WEALTH AND INVESTMENT DECISIONS INDIA Capital growth Wealth preservation Passing wealth to the next generations Portfolio liquidity Portfolio diversification GLOBAL & ASIA Wealth preservation Capital growth Passing wealth to the next generations Income return Portfolio diversification / liquidity
- 8. TOP 5 FACTORS MOST IMPORTANT FOR MILLENNIALS FOR - MANAGEMENT OF WEALTH AND INVESTMENT DECISIONS INDIA Capital growth Portfolio diversification Looking for innovative new ways to invest Portfolio liquidity Ability to move wealth quickly around the world GLOBAL & ASIA Capital growth Looking for innovative new ways to invest Portfolio diversification Income return Wealth preservation
- 9. POTENTIAL FALL IN ASSET VALUES, THE TOP THREAT Succession / inheritance issues no more a top threat India Asia Global Potential fall in asset values 34% 30% 31% Political uncertainty 24% 25% 35% Rising taxes 21% 28% 25% Tighter controls on movement of capital 16% 27% 22% Rising interest rates 16% 13% 12% Last year, the top concerns for Indians were 1. Succession / inheritance issues 2. Global economy 3. Tax for the wealthy 4. Legislation directly affecting the wealthy 5. Stock market volatility
- 10. OVERSEAS EDUCATION OF CHILDREN, THE TOP CONTEMPORARY ASPECT Succession / inheritance issues also important India Asia Global Choosing to send children overseas for education 47% 38% 28% Having a succession plan in place 21% 9% 13% Worried about passing their wealth to the next generation 18% 16% 22% Taking a more personal role in philanthropic endeavours 11% 6% 10%
- 11. BIGGEST CONCERNS REGARDING PASSING WEALTH TO THE NEXT GENERATION India Asia Global Inheritance taxes 50% 58% 58% Dividing wealth equitably between their children 50% 56% 52% Next generation will squander or mismanage their inheritance 40% 63% 62% Feel the next generation should earn its own money 30% 32% 46% Philanthropy issues 10% 9% 7%
- 12. PROPORTION OF WEALTH ALLOCATED Personal business, the highest priority followed by real estate India Asia Global Personal business 29% 24% 23% Real estate investments (excluding primary residence and second homes) 23% 29% 24% Investments (equities, bond, cash, precious metals, etc.) 22% 24% 25% Primary residences and second homes 14% 14% 16% Collectables (art, cars, wine, etc.) 8% 5% 6% Other 4% 5% 6%
- 13. IMPORTANT FACTORS DETERMINING THE DECISION TO BUY RESIDENTIAL PROPERTY TO LIVE India Asia Global Personal security 9.0 8.1 8.2 Opportunity for capital appreciation 8.5 7.8 7.4 Healthcare 8.5 7.4 7.1 Lifestyle 8.4 7.6 8.2 Education for children 8.1 8.0 7.5 Business reasons 8.0 6.9 6.8 Safe haven for capital 7.8 7.7 7.7 Access to transport links 7.7 7.1 6.9 Score out of 10
- 14. AVERAGE NUMBER OF RESIDENTIAL PROPERTIES OWNED BY WEALTHY INDIANS 3 Global 3 Asia 3 Last year, the average residential property ownership across the globe was 4 % OF WEALTHY LIKELY TO BUY ANOTHER HOME OVER THE NEXT TWO YEARS 40 Global 30 Asia 32 Last year, just 16% Indians contemplated to buy another residential property indicating the sentiment revival in the current year within their country of residence outside their country of residence 25 Global 32 Asia 29
- 15. COUNTRIES WHERE THE WEALTHY ARE MOST LIKELY TO OWN A HOME ASIAINDIA Singapore United Kingdom UAE USA Hong Kong GLOBAL United Kingdom USA France Spain Switzerland Singapore United Kingdom Hong Kong USA China
- 16. PROPERTY SECTORS ATTRACTING INTEREST From 13% last year to 34% now, logistics has climbed up the list India Asia Global Offices 55% 48% 44% Residential 48% 58% 60% Logistics 34% 21% 17% Healthcare 24% 23% 24% Retail 17% 23% 29% Leisure 17% 14% 16% Industrial 10% 16% 18% Renewable energy 7% 9% 18% Agricultural 0% 0% 0%
- 17. COUNTRIES WHERE THE WEALTHY ARE MOST LIKELY TO OWN COMMERCIAL PROPERTY ASIAINDIA Singapore United Kingdom USA Canada UAE GLOBAL United Kingdom USA Spain Germany Australia Singapore United Kingdom China USA Hong Kong
- 19. PROPORTION OF WEALTHY ALREADY HAVING A COLLECTION OF LUXURY INVESTMENTS ASIAINDIA GLOBAL 27% 38% 37%
- 20. LUXURY INVESTMENTS BECOMING MORE POPULAR ASIAINDIA GLOBAL Yes 44% Yes 47% Yes 44%
- 21. FACTORS WHILE BUILDING LUXURY COLLECTIONS For India, the top three factors remain the same as last year India Asia Global Status 8 7 7 Potential for an increase in capital values 8 7 7 Personal enjoyment 8 8 8 Diversifying their investment portfolios 7 6 6 Becoming part of a community of like- minded collectors/owners 7 6 6 Intellectual curiosity / developing own knowledge / becoming an expert 7 6 6 Safe haven for capital 7 6 6 Score out of 10
- 22. LIKELY TO OWN THE FOLLOWING In Asia, including India, the preference for these items as luxury investment and spending is substantially lower than the global average India Asia Global Motor yacht 3.9 3.8 5.4 Sailing yacht 3.5 3.7 4.7 Private jet 3.1 3.4 4.4 Race horse 3.4 3.3 4.0 Sport team 2.9 2.8 3.3 Score out of 10
- 23. KEY TAKEAWAYS
- 24. In the last 10 years, we saw additions of around 500 new UHNIs annually; over the next decade, it will be approximately 1,000 every year Out of 40 global cities, Mumbai ranks 11 in the ‘future wealth’ category ahead of Chicago, Sydney, Paris, Seoul, Dubai Mumbai at 21 in the city wealth index ahead of Toronto, Washington DC, Moscow; Delhi at 35 ahead of Bangkok, Seattle, Jakarta Office is the top property sector for investment; Logistics sees a three-fold rise in terms of interest of wealthy Indians Substantial proportion of wealthy Indians is likely to invest in residential property in the next 2 years – 40% within country and 25% overseas
Editor's Notes
- 1. Indians prefer capital growth, whereas global counterparts focus on wealth preservation. 2. Unlike preferences of global wealthy, Income returns not a top 5 priority item for Indians.
- 1. Unlike the older generation, millennials assign top priority to capital growth and not wealth preservation. 2. In fact, in India wealth preservation does not appear among the top 5 priorities.
- 1. Potential fall in asset values is the top threat followed by political uncertainty 2. Succession/inheritance issues no more amongst the top threat
- 1. Overseas education of children appears to be the top contemporary aspect. 2. Succession planning including passing of wealth to the next generation is also an important aspect. 3. In 2016, same aspects ruled the mindset of wealthy Indians.
- Inheritance tax and equitable distribution of wealth are top concerns for wealthy Indians. Squandering of inherited wealth by next generation is the top concern for global counterparts.
- In India, personal business is the highest priority, followed by real estate and then investment in financial instruments In the global context, investment in financial instruments is the top priority. But, in the Asia region, real estate is the most preferred investment avenue.
- 1. Across the globe, personal security has emerged to be the most important factor determining the decision to buy residential property to live
- In 2016, just 16% Indians contemplated to buy another residential property indicating the sentiment revival in the current year. For Asia and Global it was 27% and 29% respectively.
- 1. In India, the top countries are Singapore, UK, UAE, USA and Hong Kong. However, the preference of European countries is higher for the global wealthy.
- For wealthy Indians, office trumps residential as the top property sector. In case of global counterparts, residential continues to be at the top. Rising from 13% last year to 34% now, logistics has climbed up in the preference as the country lays impetus on ‘Make in India’ and unified indirect tax reform i.e. GST
- For wealthy Indians, office trumps residential as the top property sector. In case of global counterparts, residential continues to be at the top. Rising from 13% last year to 34% now, logistics has climbed up in the preference as the country lays impetus on ‘Make in India’ and unified indirect tax reform i.e. GST
- In 2015, 72% had reported increased spending on luxury goods in India
- Personal enjoyment is the most important factor for the global wealthy
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