The 2010 edition of The Wealth Report is the fourth such collaboration between Knight Frank and Citi Private Bank.
It includes unique insight into the following topics:
- The performance of prime global residential property
- The cities that really matter to the world's wealthy
- The attitude of the wealthy towards property and other investments
- A detailed focus on prime property markets in Asia Pacific
- The latest results from the Knight Frank Prime International Residential Index (PIRI) show that luxury house prices fell on an annual basis in almost 75% of the locations tracked by the index in 2009
- Key Asian cities, however, showed exceptional growth (Shanghai +52%, Hong Kong +40.5%), while other prime city locations also saw an improvement in performance (London +6.1%, Washington DC +5.6%)
- London has surrendered its ranking as the world’s top city to New York, according to the latest Knight Frank World Cities Survey
- Government intervention following the global credit crisis means capital cities such as Washington DC and Beijing are becoming increasingly important financial centres
- Property accounts for one-third of the investment portfolios of wealthy investors, according to The Wealth Report 2010 Attitudes Survey. Over 70% believe 2010 will be a good year to invest in property, with half predicting residential property will be the sector’s top performer
- When making investment decisions, the majority of wealth investors rely on their own expertise. Most do not expect their wealth to increase significantly in 2010, but only 4% expect it to decline
- Prime property can offer the wealthy an entirely new way of life, as well as just a new home, according to an exclusive interview with Trudie Styler
- The market for contemporary art is booming again as buyers from the world’s new economies flex their muscles
Liam Bailey, head of residential research, Knight Frank, commented:
“The Wealth Report 2010 reveals that the global market for prime residential property polarised during 2009. While some Asian cities saw phenomenal growth as China recovered strongly from the global recession, most locations around the world recorded price falls. The hardest hit were those such as Dubai and Dublin that really soared during the height of the property boom that preceded the credit crunch.
“I do believe, however, that we will see this gap narrow again in 2010. It seems unlikely that property prices in cities such as Shanghai can continue to grow at these kind of rates, and in many locations there was positive growth in the latter half of 2009. In New York, for example, prices rose 2% in the second half of the year, despite an annual slide of over 12%. It is also worth noting that Hong Kong, one of this year’s strongest performers, was one of last year’s weakest.
“Without doubt, the global recession has had a huge impact on prime property markets, but some of the changes have been more subtle than the headlines might suggest. The fiscal intervention by the administrations in Beijing and Washington DC means that these cities are now viewed as financial as well as administrative hubs. This is already having an impact on each city’s prime property market as more banks gravitate towards them.
“Government intervention, however, does not always have a positive impact on a city’s desirability. Even though prime property prices increased strongly in London last year, the city surrendered it position at the top of the Knight Frank Global Cities Survey, which ranks cities according to various factors of importance to the world’s wealthy. London’s reputation has undoubtedly suffered in light of new UK tax legislation and the government’s attack on City bonuses.
“Although there are still questions over the state of the global economy, property remains a core part of the wealthy’s investment portfolios. It accounts for one third of their investments and the majority expect it to grow in value this year. Current price falls will be viewed by many as a buying opportunity, but as the data from our Prime International Residential Index shows, these windows of opportunity do not always remain open for long.”
David Poole, head of Citi Private Bank, UK commented:
"The impact of the financial crash has not been as hard on the typical ultra-high-net worth buyer of prime property. This means that many wealthy owners of property are again looking for investments. Our clients look for opportunities when everyone else is circling the wagons. Buying becomes opportunistic in a downturn, particularly as people turn to hard assets such as property when other assets experience dislocation.”
"How to buy has never been more sophisticated. There is a myriad of direct property investment options, funds and listed and unlisted companies, as well as more complicated instruments, such as derivatives, now on offer. This allows investors to build up a portfolio spread over asset classes and sectors, as well as risk and reward.”
Visit: www.knightfrank.com/wealthreport to read each article or download the entire report.